Century Aluminum Co (CENX) Faces Headwinds in Q3 2023 with Net Sales Decline and Net Loss
Net sales decreased to $545.2 million in Q3 2023, down 5% sequentially.
Net loss attributable to Century stockholders stood at $42.0 million in Q3 2023.
Adjusted EBITDA attributable to Century stockholders dropped to $9.3 million.
Liquidity position improved to $305.8 million as of September 30, 2023.
On November 8, 2023, Century Aluminum Co (NASDAQ:CENX) released its third-quarter earnings report for the year, revealing a challenging period for the company. Net sales saw a decrease to $545.2 million, a 5% sequential decline, primarily due to lower realized aluminum prices. The company reported a significant net loss attributable to Century stockholders of $42.0 million, compared to a net income of $7.5 million in the previous quarter. Adjusted EBITDA also fell sharply to $9.3 million, down from $29.5 million in Q2 2023.
Financial Performance Analysis
Century Aluminum Co (NASDAQ:CENX) experienced a decrease in aluminum shipments from 173,649 tonnes in Q2 2023 to 171,995 tonnes in Q3 2023. The company's net sales reflected this decline, coupled with a drop in the realized LME aluminum price, which fell by $134/T from the prior quarter. Despite these challenges, Century Aluminum Co (NASDAQ:CENX) managed to complete the Mt. Holly land sale, receiving $26 million in proceeds, and reduced its total debt by $41.4 million to $512.0 million as of September 30, 2023.
Balance Sheet and Cash Flow Highlights
The company's balance sheet shows an increase in cash and cash equivalents to $70.3 million, with a strong liquidity position of $305.8 million as of the end of the quarter. The consolidated statements of cash flows indicate that net cash provided by operating activities amounted to $39.6 million for the nine months ended September 30, 2023.
Management Commentary
President and CEO Jesse Gary commented on the company's performance, stating:
Century made progress on its long-term initiatives in the third quarter. We were very pleased to reach agreement on a new three-year power contract for our Mt. Holly smelter that should enable us to continue to invest in this excellent smelter and its employees for years to come. Despite volatile market conditions, lower aluminum prices were largely offset by lower input prices and other cost savings in the quarter. Century remains focused on disciplined cost and operational execution and remains well positioned when market conditions improve."
Outlook and Strategic Initiatives
Looking ahead, Century Aluminum Co (NASDAQ:CENX) expects fourth-quarter Adjusted EBITDA to range between $0 to $10 million, based on decreased LME prices, partially offset by lower raw material prices. The company continues to focus on its strategic initiatives, including the nearing completion of the new billet casthouse at Grundartangi and the engagement for its new Natur-Al low-carbon billet products.
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Explore the complete 8-K earnings release (here) from Century Aluminum Co for further details.
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