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CENTURY ALUMINUM CO (CENX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered mixed results: net sales of $628.1M (-$5.8M q/q) and GAAP diluted EPS of -$0.05, while adjusted EPS was $0.30 and adjusted EBITDA was $74.3M, down modestly q/q on higher raw material costs and FX headwinds .
  • Versus S&P Global consensus*, revenue modestly beat ($628.1M vs $611.4M), EPS slightly missed ($0.30 adj vs $0.33), and adjusted EBITDA trailed the Q1 guide (Q1 guide for Q2 was $80–$90M) as energy, FX and alumina costs offset higher regional premiums .
  • Management guided Q3 adjusted EBITDA to $115–$125M, citing the step-up from higher lagged Midwest premium driven by Section 232 tariffs (now 50%), with additional uplift expected into Q4 as pricing lags catch up .
  • Strategic catalysts: announced restart of the last 50kt at Mt. Holly (full ~220ktpa by Q2 2026) and a July refinancing into $400M 6.875% notes due 2032 lowering coupon and extending maturities .

What Went Well and What Went Wrong

  • What Went Well

    • Strong pricing tailwinds emerge: Midwest premium rose as Section 232 tariffs increased (25% effective Mar 12 and 50% effective Jun 4); spot Midwest premium near ~$1,600/t with full P&L impact lagging into Q4 .
    • Mt. Holly restart announced (+50kt); project spend ~$50M, ~100+ jobs; extends domestic primary footprint nearly +10% and targets full run-rate by end of Q2 2026 .
    • Balance sheet progress: completed refinancing to $400M 6.875% Sr Secured Notes due 2032, simplifying debt and lowering interest expense .

  • What Went Wrong

    • Sequential EBITDA compression: adjusted EBITDA fell to $74.3M (from $78.0M) on higher raw materials, operating expenses and FX (ISK appreciation), partially offset by stronger regional premiums and volumes .
    • Non-GAAP adjustments were sizable ($35M net exceptional items), including an Iceland inventory adjustment ($14.5M net of tax), unrealized derivative losses ($11.5M net of tax), casthouse inefficiency, and a transformer failure .
    • Guidance shortfall vs prior quarter guide: Q1’s outlook for Q2 adjusted EBITDA ($80–$90M) was not achieved; delivered $74.3M as June energy costs and FX muted benefits from premiums .

Financial Results

Headline metrics (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Net Sales ($MM)$630.9 $633.9 $628.1
Shipments (tonnes)166,677 168,672 175,741
GAAP Diluted EPS$0.44 $0.29 -$0.05
Adjusted EPS$0.42 $0.36 $0.30
Adjusted EBITDA ($MM)$80.9 $78.0 $74.3

Profitability detail (derived margins shown using cited components)

MetricQ4 2024Q1 2025Q2 2025
Gross Profit ($MM)$66.3 $60.6 $36.2
Gross Margin %10.5% 9.6% 5.8%
Operating Income ($MM)$49.3 $46.1 $20.7
Operating Margin %7.8% 7.3% 3.3%

Versus S&P Global consensus (Q2 2025)

MetricConsensus*ActualResult
Revenue ($MM)$611.35*$628.10 Beat
EPS (Adj)$0.33*$0.30 Slight miss

Segment/geography shipment and sales breakout

Q4 2024 USQ4 2024 IcelandQ4 2024 TotalQ1 2025 USQ1 2025 IcelandQ1 2025 TotalQ2 2025 USQ2 2025 IcelandQ2 2025 Total
Shipments (tonnes)89,613 77,064 166,677 94,601 74,071 168,672 94,519 81,222 175,741
Sales ($MM)$267.4 $215.2 $482.6 $306.6 $217.3 $523.9 $324.4 $233.7 $558.1

Selected KPIs

KPIQ1 2025Q2 2025
Liquidity ($MM)$339.1 (cash $44.9 + availability) $362.5 (cash $40.7 + availability)
Realized Midwest Premium ($/t)$602 $850
Realized LME ($/t)—$2,540
Adj EBITDA guidance for next qtr$80–$90 (Q2 guide issued in Q1) $115–$125 (Q3 guide)

Non-GAAP adjustments (Q2): Items totaling ~$35M (net), including Iceland inventory adjustment ($14.5M net of tax), unrealized derivative losses ($11.5M net of tax), share-based comp, Iceland casthouse inefficiency, and transformer failure .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($MM)Q2 2025$80–$90 (issued May 7) Actual $74.3 Below guidance
Adjusted EBITDA ($MM)Q3 2025—$115–$125 (lagged premiums tailwind) New/raised sequentially
Pricing drivers (modeling)Q3 2025—Lagged LME $2,495/t (≈-$45 vs Q2), lagged Midwest premium ≈$1,450/t (+$600 vs Q2), Europe premium $200/t (-$20), net +$50M y/y to EBITDA; energy -$5M; currency -$5M; OpEx +$5–$10M; volume/mix -$0–$5M; hedges -$5–$10M; tax -$0–$5M Detailed drivers added

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Section 232 tariffs / Midwest premiumExpected to restore effectiveness (25% from Mar 12); Midwest premium rising; not assuming Canada tariffs Further increase to 50% (Jun 4); spot Midwest ~ $1,600/t; full benefit lagged into Q4 Strengthening tailwind
Mt. Holly restartUnder evaluation; 9-month timeline possible; tariff very constructive Restart of final 50kt announced; ~$50M capex; full ~220ktpa by Q2 2026 Moving to execution
Hawesville strategic reviewOngoing with strong interest In final negotiations; decision expected by end of Q3 Nearing resolution
Jamalco investment/turbineCapex to raise output toward nameplate; 2025–26 investments Turbine on-site; integration underway; self-powering in 2026; Atlantic alumina premium supportive Operational progress
Energy costsSeasonal increases expected in Q1 June heat raised Q2 power costs; normalization in Aug; nat gas ~$3/MMBtu supportive Normalizing post-heatwave
Europe billet/casthouseGrundartangi recovering from curtailments; billet ramp Casthouse ramping; Europe billet premiums firming Improving

Management Commentary

  • “This project will increase U.S. primary aluminum production by nearly 10% and would not have been possible without the Section 232 program, which is working to secure our national security needs.” – CEO Jesse Gary on Mt. Holly restart .
  • “Because of our contractual lags on our revenues, the strong price environment we see today will continue to drive our earnings growth beyond Q3 and into Q4.” – CFO commentary on lagged pricing uplift .
  • “We successfully completed the refinancing… with new $400,000,000 senior secured notes at 6.8[7]%, extending the maturity to 2032 and simplifying our debt structure.” – CFO on balance sheet actions .
  • “Spot Midwest premium today is sitting at close to $1,600 per tonne… [tariffs] will only partially affect our results in Q3 and then be fully reflected in our results in Q4.” – CEO on pricing dynamics .

Q&A Highlights

  • Mt. Holly inputs and incentives: Alumina needs covered within existing 2026 book; incentives and power contract details not yet public; project ~90 pots with ~straight-line ~$4M/month spend through completion in 2026 .
  • 45X credits: Receivable of ~$195M as of June 30 (FY23, FY24, 1H25); FY23 cash “imminently,” FY24 over 6–9 months; incremental Mt. Holly tons eligible for 45X on US production .
  • New smelter milestones: Next step is energy/site selection announcement; then site-specific engineering (6–9 months); major capex likely 2026 .
  • Q4 earnings power: At current spot (LME >$2,600/t, Midwest ~$1,600/t), sensitivities imply uplift vs Q3 realized, supporting Q4 step-up .
  • Europe billet and Grundartangi: Casthouse ramp progressing; billet premiums firming as Europe duty-paid premium fell .

Estimates Context

  • Q2 2025 consensus (S&P Global)*: Revenue $611.35M vs actual $628.1M (beat); EPS $0.33 vs adjusted EPS $0.30 (slight miss). Adjusted EBITDA tracked below the prior guide ($80–$90M) at $74.3M as energy/FX/raw materials offset premiums .
  • Near-term estimate revisions likely skew higher for Q3–Q4 given explicit Q3 guide ($115–$125M) and expected further uplift in Q4 as lagged Midwest premium and LME roll through .
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Tariff-driven pricing tailwinds are building; with contractual lags, the bulk of the benefit is positioned to show in Q3 and especially Q4, underpinning momentum into year-end .
  • Q2 was an operationally solid but financially mixed print: revenue beat, adjusted EPS slight miss, adjusted EBITDA below prior guidance due to June energy, FX and alumina headwinds; those headwinds are moderating/normalizing into Q3 .
  • Mt. Holly restart is a concrete capacity/cash flow catalyst for 2026 with favorable fixed-cost absorption; incentives and power contract finalization are near-term milestones .
  • Balance sheet de-risking via 2032 notes at 6.875% reduces interest burden and extends runway ahead of growth projects (Mt. Holly, new U.S. smelter) .
  • Watch Q3 execution vs $115–$125M EBITDA guide and the cadence of 45X cash receipts; upside risk to Q4 numbers if spot Midwest premium and LME hold .
  • European billet dynamics improving; Grundartangi casthouse ramp supports value-added mix into 2026 .
  • Hawesville outcome (sale/development vs restart) expected by end of Q3—could unlock value or alter U.S. production optionality .

Appendix – Additional Context

  • Sequential walk (Q1→Q2 adjusted EBITDA): premiums +$11M, energy +$2M, alumina/other raw materials -$8M, FX -$4M, Seebree maintenance -$10M, volume/mix +$5M .
  • Q3 modeling parameters: lagged LME $2,495/t (-$45 q/q), Midwest premium ~+$600/t to $1,450/t, Europe premium $200/t (-$20 q/q); net price effect +$50M; energy -$5M; FX -$5M; OpEx +$5–$10M; volume/mix -$0–$5M; hedges -$5–$10M; tax -$0–$5M .

Citations:

  • Q2 2025 8-K press release, financials, and non-GAAP reconciliations .
  • Q2 2025 earnings call transcript (prepared remarks, guidance and Q&A) .
  • Q1 2025 8-K (comparatives and prior guidance) .
  • Q4 2024 call (prior themes and setup for 2025) .
  • Mt. Holly restart press release ; $400M 6.875% due 2032 financing press release .