Q2 2026 Century Aluminum Co Earnings Call Transcript
Key Points
- Century Aluminum Co (CENX) successfully completed the Mt. Holly expansion and the restart of Grundartangi's Line 2, bringing all assets to full capacity for the first time in over a decade, ahead of schedule.
- The company reported strong Q2 2026 financial results with adjusted EBITDA of $327 million, a $96 million increase sequentially, driven by higher LME prices, regional premiums, and increased volumes.
- Century Aluminum Co (CENX) strengthened its balance sheet, ending Q2 with $388 million in cash, no outstanding borrowings on credit facilities, and net debt reduced to $98 million; by end of July, cash exceeded total debt.
- The new executive order provides Century Aluminum Co (CENX) with a significant tariff benefit, allowing imports of up to 300,000 metric tons per year at a reduced 25% rate starting in 2027, which will help fund the Oklahoma smelter project.
- The Jamalco refinery brought its new TG4 turbine online, enabling self-generated energy, which is expected to reduce costs by approximately $20 per ton and eliminate reliance on expensive grid purchases.
- Market conditions remain robust with a projected global aluminum deficit of around 1 million tonnes in 2026 and 2027, supporting strong pricing and demand for Century Aluminum Co (CENX)'s output.
- Century Aluminum Co (CENX) experienced some operational instability at Mt. Holly following the restart, which is expected to have a negative impact on Q3 2026 results, though it is anticipated to be resolved by Q4.
- The Grundartangi plant is running at slightly reduced amperage until new transformers are installed in Q4, limiting production volumes and potentially affecting output in the near term.
- Jamalco continues to face headwinds from lower quality bauxite in certain mining areas, which is expected to modestly impact costs and volumes for another couple of quarters.
- Q3 2026 outlook includes energy headwinds of $10 million to $15 million due to warmer summer weather, and moderate increases in raw material costs are expected to be a $5 million sequential headwind.
- The company faces a $20 million to $25 million headwind from realized hedge settlements and $10 million to $15 million in tax expenses in Q3, which will impact adjusted net income and EPS.
- The Oklahoma smelter project faces uncertainties, including ongoing negotiations for a final energy contract and community concerns in Oklahoma, which could delay the FID and groundbreaking timeline.
Hello, everyone. Thank you for joining us, and welcome to the Century Aluminum Company second quarter 2026 earnings conference call. (Operator Instructions)
I will now hand the conference over to Chad Rigg, Vice President, Finance and Treasurer. Please go ahead.
Thank you, operator. Good afternoon, everyone, and welcome to the second quarter conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer; and Peter Trpkovski, Executive Vice President and Chief Financial Officer. After our prepared comments, we will take your questions. As a reminder, today's presentation is available on our website at www.centuryaluminum.com. We use our website as a means of disclosing material information about the company and for complying with Regulation FD.
Turning to slide 2. Please take a moment to review the cautionary statements with respect to forward-looking
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