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Century Aluminum Company Q1 2010 Earnings Call Transcript

Century Aluminum Company Q1 2010 Earnings Call Transcript

Century Aluminum Company (CENX)

Q1 2010 Earnings Call

April 27, 2010 5:00 pm ET


Shelly Lair - VP and Treasurer

Logan Kruger - President and CEO

Wayne Hale - EVP and COO

Mike Bless - EVP and CFO


Kuni Chen - Banc of America/Merrill Lynch

Brett Levy - Jefferies & Co.

David Gagliano - Credit Suisse

Tony Rizzuto - Dahlman Rose

Tim Hayes - Davenport & Co.

Mark Bonamo with Morgan Stanley


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Ladies and gentlemen, thank you for standing by, and welcome to the Century Aluminum first quarter 2010 earnings call. At this time all lines are in a listen-only mode. Later there will be an opportunity for your questions and instructions will be given at that time. (Operator instructions) As a reminder, this conference is being recorded.

I’ll now turn the conference over to your host, Shelly Lair; please go ahead ma’am.

Shelly Lair

Thank you, Kathy. Good afternoon, everyone and welcome to the conference call. For those of you join us by telephone, this presentation is being webcast on the Century Aluminum website Please note that website participants have the ability to advance their own slides. The following presentation and related comments by Century management contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Information provided in this presentation and discussion is based on the information available as of April 27, 2010. We believe the expectations reflected in these forward-looking statements are reasonable based on information available to us on the date of this presentation. However, given the described uncertainties and risks, we cannot guarantee our future financial performance, results of operations, or financial condition, and you cannot place undue reliance on these forward-looking statements.

Century undertakes no duty to update or revise any forward-looking statements, whether as the result of new information, actual events, future events, or otherwise. In addition, throughout this conference call, we will use non-GAAP financial measures. Reconciliation to the most comparable GAAP financial measures can be found in the appendix of today’s presentation and on our website.

I’d now like to introduce Logan Kruger, Century’s President and Chief Executive Officer.

Logan Kruger

Thank you very much, Shelly. Good afternoon everyone and thank you for joining us. We welcome the opportunity to report on our progress today. So let’s move onto slide number four. We were pleased with our first quarter performance. We have continued to evolve the company’s financial strength, and have made good progress on some of our important long-term strategic objective. My colleagues and I will give you some details during the next few minutes.

We continued to see decent improvement in many fundamental measures of market activities. In the U.S. and in Europe, the pace of manufacturing recovery has been increasing. Certain industries, notably automotive are experiencing their first meaningful increase and activities levels in the last several years.

The supply chains remain genuinely lien, with distributors and other intermediary continued to exhibit a wait and see mentality. Despite recent restrictive efforts by monetary authorities in both China and India, those economies continued to perform very well.

Turning to trend, which gives us our pause, certain industries remains depressed, commercial construction being a good example of those and we remain under the watchful eye of the warehouse and other stocks and further on the actual amount of metal available to the market. There are myriad of factors as you know, as well as the desperate of the aluminum ETS and the changing shape of the forward price curve, which can influence these critical measures.

Operations continued to perform very well, first our safety results are already above those of the industry continued to show consistent improvement. This result is a testament to Wayne and his team at each of our applause. Hawesville had a good quarter and continues to scrutinize every aspect of its cost structure was a review to what the step up in realized power process the smelter will see in 2011.

Grundartangi is also operating well and continues to produce a premium to its rated capacity. We had a busy quarter in labor relation, we have received a tentative new five year contract with Nordural unions in Iceland, and we are working hard in a constructive dialogue with the steel workers in Hawesville to finalize a new mutually acceptable contract that provides a base for this smelter’s long-term competitiveness.

We are focusing on two major issues at Mt. Holly. Applied is still showing only a slow return to normalcy from our operational issues it faced in last year, and we cover on has been significant amount of time talking on month to ourselves then were power supply about the long term future of that power arrangement at Mt. Holly, the plant is still showing only a show return to normal of operational issues it faced last year and we Ottawa has been significant amount of time talked amongst ourselves and then with the power supply about the long-term future of that far arrangement at Mt. Holly.

Again our goal here is to obviously find a structure, which provides for the long-term economic competitiveness of the business. We are finding a complex business environment in Iceland, but are working very hard to restart nature project activities. We continued to be encouraged by the fact that important constituency the local and national government, the party in general remains very supportive of this project.

Way we thought is, it will be the largest economic development in Iceland and that’s an important contribution to the written to strength of the Icelandic economy of our number of years. I’ll comment a bit more in detailed in a few minutes

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