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CENTURY ALUMINUM CO (CENX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue rose slightly sequentially to $633.9M and shipments increased 1% to 168,672 tonnes; adjusted EBITDA was $78.0M, down modestly versus Q4 on higher energy and raw material costs .
  • Versus S&P Global consensus, revenue was a significant beat ($633.9M vs $527.0M*), while adjusted EPS missed ($0.36 vs $0.59*) as onetime alumina cost timing and weather-driven power costs weighed; EBITDA vs consensus appeared lower given definitional differences (company-reported adjusted EBITDA of $78.0M vs SPGI EBITDA estimate of $86.0M*) .
  • Q2 2025 guidance: adjusted EBITDA of $80–$90M, supported by a full-quarter Midwest premium uplift (expected $866/ton) and easing energy costs, partially offset by temporary maintenance and seasonal labor .
  • Catalysts: strengthened U.S. Section 232 tariffs (25%) lifting Midwest premium and domestic demand, liquidity up to $339.1M, and ongoing Jamalco cost-improvement program; management expects sustained premium strength and continued deleveraging .

What Went Well and What Went Wrong

  • What Went Well

    • Premiums and LME pricing: Realized Midwest premium averaged $602/ton (+38% q/q) and realized LME averaged $2,553/ton, supporting top-line resilience despite input headwinds .
    • Liquidity and leverage: Liquidity increased to $339.1M and net debt fell by $55M, aided by working capital reduction and strong operating performance .
    • Iceland operations and contracts: Grundartangi returned to full production post-curtailments; ON Power PPA extended through Q1 2032; management: “we reached an extension… ON Power to continue to supply the plant into 2032” .

  • What Went Wrong

    • Energy and raw materials: Polar vortex-linked spikes raised U.S. energy costs; alumina and other raw materials were a $27M q/q headwind; Q1 adjusted EBITDA decreased $2.9M q/q .
    • Onetime costs and derivatives: Emergency energy charges at Mt. Holly ($3.5M) and unrealized derivative losses ($3.0M net of tax) depressed GAAP EPS; adjusted net income fell to $36.6M .
    • European billet demand: Softer-than-anticipated billet orders in Europe pressured Grundartangi value-add mix; only a “small uptick” entering Q2 (watch for trend confirmation) .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Millions)$539.1 $631.0 $633.9
Gross Profit ($USD Millions)$81.8 $67.8 $60.6
Operating Income ($USD Millions)$63.8 $50.8 $46.1
Net Income Attributable to Century ($USD Millions)$47.3 $47.7 $29.7
Diluted EPS ($USD)$0.46 $0.47 $0.29
Adjusted Net Income ($USD Millions)$60.0 $45.9 $36.6
Adjusted EPS ($USD)$0.63 $0.49 $0.36
Adjusted EBITDA ($USD Millions)$103.7 $82.4 $78.0

Margins (S&P Global data; company-reported definitions may differ)

MarginQ3 2024Q4 2024Q1 2025
EBITDA Margin %16.12%*10.51%*10.54%*
EBIT Margin %11.83%*7.81%*7.27%*
Net Income Margin %8.77%*6.78%*4.69%*

Values with * retrieved from S&P Global.

Vs. Wall Street Consensus (S&P Global)

MetricQ4 2024 Estimate*Q4 2024 ActualΔ vs Est.Q1 2025 Estimate*Q1 2025 ActualΔ vs Est.
Revenue ($USD Millions)$515.3*$630.9 +$115.6M; bold beat$527.0*$633.9 +$106.9M; bold beat
Primary EPS (Normalized) ($USD)$0.445*$0.49 +$0.045; beat$0.59*$0.36 -$0.23; bold miss
EBITDA ($USD Millions)$77.0*$82.4 +$5.4; beat$86.0*$78.0 -$8.0; miss

Values with * retrieved from S&P Global.

Segment/Geography KPIs

MetricQ1 2024Q4 2024Q1 2025
U.S. Shipments (tonnes)97,602 89,613 94,601
U.S. Sales ($USD Millions)$258.1 $267.4 $306.6
Iceland Shipments (tonnes)77,025 77,064 74,071
Iceland Sales ($USD Millions)$189.5 $215.2 $217.3
Total Shipments (tonnes)174,627 166,677 168,672
Total Primary Sales ($USD Millions)$447.6 $482.6 $523.9

Other KPIs

KPIQ4 2024Q1 2025
Realized LME Price ($/ton)$2,462 $2,553
Realized U.S. Midwest Premium ($/ton)$436 $602
Realized European Delivery Premium ($/ton)$341 $336
Liquidity ($USD Millions)$244.5 $339.1
Cash & Cash Equivalents ($USD Millions)$32.9 $44.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($USD Millions)Q1 2025$75–$85 Actual $78.0 Met midpoint
Adjusted EBITDA ($USD Millions)Q2 2025N/A$80–$90 New guide
U.S. Midwest Premium ($/ton, lagged)Q1 2025~$600 Actual $602 Inline
U.S. Midwest Premium ($/ton, lagged)Q2 2025N/A$866 Raised (tariff-driven)
European Delivery Premium ($/ton, lagged)Q1 2025~$345 Actual $336 Slightly lower
European Delivery Premium ($/ton, lagged)Q2 2025N/A$220 Lower
Energy CostsQ2 2025N/A~$10M tailwind Tailwind
Raw Materials (coke/pitch/caustic)Q2 2025N/A$5–$10M headwind Headwind
OpEx (maintenance + seasonal labor)Q2 2025N/A$10–$15M one-time One-time increase
TaxesQ2 2025N/A~$5M headwind Headwind
Hedge SettlementsQ2 2025N/A~$5M headwind Headwind

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
Tariffs / Midwest PremiumAnticipated tariff strengthening; spot Midwest near $0.39; expectation of $0.45–$0.50 if 25% tariff enacted Section 232 raised to 25%; realized Midwest $602/ton; spot near $0.39; management expects $0.45–$0.50 as inventories normalize Improving
Energy Costs (U.S.)Mild Q4; warned Q1 seasonality headwind (~$15M) Polar vortex caused elevated Q1 costs; Q2 easing (~$10M tailwind) Improving
Alumina / Raw MaterialsFM benefit ($12M) in Q4 offset higher spot purchases flowing through Q1; coke/pitch uptick Q1 headwind ($27M); Q2 raw material headwind $5–$10M; alumina vessel timing explained Mixed
European Billet DemandWeakness noted; contract dynamics lag spot “Small uptick” entering Q2; awaiting trend confirmation Stabilizing (early signs)
Jamalco CapEx & Cost CurveTurbine project and workforce actions; second quartile target Turbine on track by year-end; Q1 highest quarterly volume since acquisition; benefits expected starting Q1 2026 Positive execution
Mt. Holly / Sebree OpsMt. Holly instability in Q4; Sebree strong Mt. Holly emergency energy charges; Sebree bringing forward carbon maintenance ($10M one-time) Mixed (temporary costs)
New U.S. Smelter ProjectDOE $500M grant award; nearing site selection & power Next milestones: finalize power, site selection; significant CapEx post-2026; >1,000 jobs envisioned Advancing planning

Management Commentary

  • “Century generated $78 million of adjusted EBITDA in the first quarter, driving a reduction in net debt of $55 million and increasing liquidity by $94 million.”
  • “Realized LME prices averaged $2,553 in Q1, while realized Midwest and European premiums averaged $602 and $336… Regional premiums have seen the most movement so far in Q2 with spot Midwest premium today sitting at close to $850 a ton….”
  • “We reached an extension agreement… ON Power to continue to supply [Grundartangi] into 2032.”
  • “We expect Q2 adjusted EBITDA in the range of $80 million to $90 million… lagged U.S. Midwest premium… $866 per ton, up $265.”
  • “The outage [Sebree carbon plant] will drive a onetime increase in maintenance spend in the second quarter of about $10 million.”
  • “We strongly support today’s Executive Order… imposing a 25% tariff to stop the flood of aluminum imports into the United States.”

Q&A Highlights

  • One-time OpEx clarification: “Incremental OpEx costs of $10–$15M… that should be onetime in Q2.”
  • Alumina timing: Q1 alumina headwind largely timing of high-priced vessel sales; prices fell into Q2 .
  • 45X cash timing: Expect ~$60M cash receipt for FY’23 in Q2; remaining ~$20M later this year or early next .
  • Capital allocation: Priority remains debt reduction alongside ongoing CapEx at Jamalco .
  • New smelter milestones: Finalize power and site selection next; meaningful CapEx deployment likely post-2026 .
  • Premium outlook: Management expects Midwest premium to stabilize in $0.45–$0.50 range as inventories normalize .

Estimates Context

  • Q1 2025 results vs consensus: Revenue was a significant beat ($633.9M vs $527.0M*), adjusted EPS missed ($0.36 vs $0.59*). Only one estimate cited for Q1 revenue/EPS, increasing potential variance. EBITDA consensus ($86.0M*) is not strictly comparable to company-reported adjusted EBITDA ($78.0M) due to definition differences .
  • Q4 2024 had revenue and EPS beats versus consensus ($630.9M vs $515.3M*; $0.49 vs $0.445*), reflecting strong alumina sales and premium support .

Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Tariff tailwind should be more fully reflected in Q2 via Midwest premium lag, supporting the $80–$90M adjusted EBITDA guide; watch realized premiums and inventory digestion .
  • Near-term headwinds (raw materials, one-time maintenance and seasonal labor) are transitory; energy tailwinds and premium strength offset, tilting risk to the upside in H2 if premiums sustain .
  • Liquidity improved to $339.1M; expected 45X cash inflows in Q2 enhance balance sheet flexibility and deleveraging capacity .
  • Operational execution remains solid: Sebree reliability program and Grundartangi back to full production; Jamalco turbine project is a key 2026 cost catalyst .
  • EPS variability stems from macro inputs (energy, alumina, derivatives); focus on adjusted EBITDA and cash generation as truer indicators of core performance .
  • Strategic optionality: potential Mt. Holly restart analysis, Hawesville process, and greenfield U.S. smelter provide meaningful volume and margin optionality if premiums and policy stay supportive .
  • For positioning, emphasize exposure to U.S. billet and value-add demand and tariff-supported Midwest premium; trade around quarterly input cost volatility and catalysts from premium prints and 45X cash receipts .