Century Aluminum Reports $34.6M Second Quarter Loss - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Century Aluminum Reports $34.6M Second Quarter Loss

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Century Aluminum's first earnings call from its new headquarters in Chicago July 30 was nearly completed without any mention of its Ravenswood aluminum smelter that has been closed since 2009.

Century reported a second quarter 2013 loss of $34.6 million in the midst of a rate hearing in Kentucky and silent on any plans for operations in West Virginia.

Century President and CEO Mike Bless said Century is prepared to operate "through this challenging environment in the near-term, but remain confident that attractive demand coupled with constrained supply outside of China will push aluminum prices upward over time."

Bless said the company has been busy during the past few months. Its agreement for power at its Hawesville, Ky. plant is waiting on regulatory approvals.

A public hearing was scheduled for July 30 in Kentucky to help determine if Century could access the wholesale open market for power. The new arrangement would allow Century to buy power at market terms and pay a small fee to the power company to cover its direct costs.

"We believe that the terms of this new contract would allow Hawesville to be competitive in the global market," Bless said in a prepared statement. "In early June, we acquired the Sebree, Ky. smelter from Rio Tinto Alcan.

"Sebree's power contract is with the same supplier as Hawesville and expires in January 2014; we are confident that, assuming Hawesville's power contract is approved, we would be able to move this plant to an arrangement similar to Hawesville's pending contract."

Century was engaged in a lengthy rate hearing in West Virginia last summer, and has not moved forward with power rate negotiations to reopen its Ravenswood smelter.

Bless, when asked about the Ravenswood plant near the end of the call, said there was no change in the situation in Jackson County.

"The long answer is we're continuing to talk there with the power company and the state and the rest of the constituents and the retiree group on finding a way," Bless said. "We haven't lost our interest in reopening this plant.

"We think maybe the solution we're hopefully about to reach here in Kentucky might hold some answers on how to breach the final gap in West Virginia, but the short answer is there's no change in Ravenswood, regrettably."

The company reported a net loss of $12.3 million during the second quarter of 2012, by comparison.

Sales for the second quarter of 2013 were $331.9 million, compared to $323.6 million for the second quarter of 2012. Shipments of primary aluminum for the 2013 second quarter were 176,270 tonnes, compared with 160,828 tonnes shipped in the 2012 second quarter, by comparison.

"We are managing through a period of uncertainty in our industry," Century President and Chief Executive Officer Michael Bless said in a statement. "The slowing in China's economy, the extent and impact of which remain difficult to determine, has clearly begun to impact European and other developed and developing economies.

"In contrast, our U.S. customer markets remain generally sound, with particular strength in the transportation and construction sectors."

Bless said Century's Mt. Holly, S.C. plant has a market-based power arrangement, and he thought the company had "significantly improved the competitive dynamic of our U.S. system."

Bless said Century is continuing to invest in its plant in Iceland, but has ceased all discretionary spending.

Century's priorities for the next quarter include finalizing the agreements for power at the Hawesville plant and then to replicate that arrangement for Sebree. Another priority the company listed during its quarterly earnings conference call was to "preserve financial flexibility in an uncertain market environment."