23 July
MONTEREY,
Press Release

Century Aluminum Company reported a net loss of $33.9 million ($0.46 per basic and diluted share) for the second quarter of 2009. Reported second quarter results were negatively impacted by a charge of $9.2 million ($0.12 per basic and diluted share) related to ongoing costs associated with the production curtailments at the Ravenswood, WV and Hawesville, KY primary aluminum smelters. Lower of cost or market inventory adjustments of $26.9 million ($0.36 per basic and diluted share) favorably impacted the quarterly results.

In the second quarter of 2008, the company reported a net loss (as adjusted to reflect the implementation of FASB Staff Position APB 14-1 — Accounting for Convertible Debt Instruments) of $3.5 million ($0.08 per basic and diluted share), which included an after-tax charge of $129.9 million ($3.16 per basic share) for mark-to-market adjustments on forward contracts that did not qualify for cash flow hedge accounting and a non-cash after-tax benefit of $15.5 million ($0.38 per basic share) resulting principally from a reduction in non-U.S. corporate tax rates. The dilutive effect of the convertible notes, options and service-based awards would have reduced basic EPS by $0.21. Cash used to settle forward contracts that did not qualify for cash flow hedge accounting was $62.8 million.

Recent highlights included:

-  Approximately 28 percent of Century’s global (or 42 percent of its
    U.S.) primary aluminum capacity remains curtailed. The Gramercy alumina
    refinery continues to produce at approximately 50 percent of its capacity
    for smelter grade alumina.
-  The Grundartangi smelter shipped at an annual rate of approximately
    276,000 metric tons during the quarter.
-  The company finalized a new, long-term, cost-based, power contract for
    the Hawesville, KY smelter.
-  Nordural maintained modest activity levels at its greenfield project
    site near Helguvik, Iceland, and is progressing plans for a possible
    restart of major construction activities.
-  Cash totaled $230 million on June 30, 2009.


Sales in the second quarter of 2009 were $189.2 million, compared with $545.2 million in the second quarter of 2008. Shipments of primary aluminum for the quarter totaled 145,693 tonnes compared with 198,172 tonnes in the year-ago quarter.

For the first half of 2009, the company reported a net loss of $148.5 million ($2.14 per basic and diluted share). Included in these results is a charge of $33.5 million ($0.48 per basic and diluted share) for costs associated with production curtailments at the Ravenswood, WV and Hawesville, KY primary aluminum smelters and a favorable inventory market value adjustment of $24.6 million ($0.35 per basic and diluted share). This result compares with a net loss (as adjusted for FASB Staff Position APB 14-1) of $237.4 million ($5.78 per basic and diluted share) in the year-ago period, which included an after-tax charge of $415.8 million ($10.12 per basic share) for mark-to-market adjustments on forward contracts that did not qualify for cash flow hedge accounting. The dilutive effect of the convertible notes, options and service-based awards would have reduced basic EPS for the first half of 2008 by $0.30 per share. During the first half of 2008, cash used to settle forward contracts that did not qualify for cash flow hedge accounting was $115.0 million.

Sales in the first six months of 2009 were $413.7 million compared with $1,016.3 million in the same period of 2008. Shipments of primary aluminum for the first six months of 2009 were 311,181 tonnes compared with 397,894 tonnes for the comparable 2008 period.

"We made steady progress toward our goals of liquidity enhancement and operational restructuring during the quarter," said president and chief executive officer Logan W. Kruger. "Our teams at Hawesville and Grundartangi have done outstanding jobs in reducing the cost of their operations. The new power contract for Hawesville protects the Company in the short term and enhances the smelter’s longer-term prospects. These efforts, coupled with the capacity curtailment actions earlier in the year, have strengthened Century’s liquidity.

"Despite recently improving metal prices, we believe the balance of risk remains on the downside," continued Mr. Kruger. "The demand outlook has improved somewhat in certain regions and sectors. However, we remain convinced the industry must take additional supply side actions for a global balance to be achieved. We continue to plan for a challenging industry environment over the near- and medium-term.

"The future of the Helguvik project remains a key focus," Mr. Kruger concluded. "This project is world class in every facet and will pay attractive returns to Century’s shareholders over the long-term. We are making progress in our efforts to restart major construction activities as soon as practical, consistent with our requirement of protecting the Company’s financial position."

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an interest in alumina and bauxite assets in the United States and Jamaica. Century’s corporate offices are located in Monterey, California.