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    CENX
    Earnings call· Mar 2026(Q1 FY26)

    CENTURY ALUMINUM Q1 FY26 earnings call CENX

    May 7, 2026 Source

    Executive summary

    Century Aluminum Company Q1 FY26 — Strong Operational Performance and Strategic Project Progress

    Century Aluminum delivered strong Q1 FY26 results, driven by robust operational performance and progress on key expansion projects at Mt. Holly and Grundartangi. The company is strategically positioned to capitalize on a dynamic global aluminum market, marked by significant Middle East supply disruptions and increasing demand for secure U.S. supply chains, with the Oklahoma smelter project advancing towards a final investment decision.

    Highlights

    5

    • Strong Q1 operational performance across Grundartangi, Mt. Holly, and Sebree, enabling timely project execution.

    • Mt. Holly expansion progressing on schedule to bring full expansion online by end of June, increasing U.S. primary aluminum production by nearly 10%.

    • Grundartangi Potline 2 restart on schedule to restore all pots by end of July.

    • Adjusted EBITDA of $231 million in Q1, up $60 million sequentially, driven by higher LME and regional premiums.

    • Net debt declined to $220 million, below the target of less than $300 million, enhancing financial flexibility.

    Concerns

    4

    • Middle East disruptions led to an estimated 2.5 million tons of production disruption and expanded the 2026 global deficit to 1.4 million tons.

    • Higher energy prices for Sebree due to Winter Storm Fern and increased input costs for coke, pitch, and caustic.

    • Jamalco experienced lower quality bauxite and increased HFO/caustic prices, impacting alumina input costs.

    • Insurance recoveries trailed claims by $38 million in Q1, though $46 million was received in early April, indicating a timing mismatch.

    Guidance & targets

    2
    CategoryTargetConfidence
    Adjusted EBITDA
    $315 million to $335 million
    high materiality
    High
    Oklahoma Smelter Project Final Investment Decision and Groundbreaking
    by the end of the year
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Mt. Holly
    The expansion project started its first pots three weeks ago and is progressing on schedule to bring the full expansion online by the end of June. This project is expected to fully repay its capital cost by the end of 2026. The full impact of expanded production run rate will not be seen until Q3.
    Total production: 230,000 metric tons (post-expansion)U.S. primary aluminum production increase: nearly 10%
    		————
    Grundartangi
    Restarted the first pots on Line 2 on April 23. The restart has gone well and is on schedule to restore all pots by the end of July. The plant will return to nearly full production but will run on slightly reduced amperage until new replacement transformers are installed in Q4.
    Potline 2 restart: all pots by end of July
    		————

    Operational metrics

    24
    Net sales
    $649 millionup $15 million
    Q1 FY26

    Primarily driven by higher LME prices and regional premiums despite lower shipment volumes.

    Adjusted Net Income
    $171 million
    Q1 FY26

    Excluding exceptional items.

    Adjusted EBITDA
    $231 millionup $60 million
    Q1 FY26

    Driven by higher LME and regional premiums, improved operating expenses, and favorable sales mix, partially offset by higher energy prices and raw material costs.

    Realized LME
    $2,900up $285
    Q1 FY26

    Compared to prior quarter.

    U.S. Midwest Premium
    $2,200up $420
    Q1 FY26

    Compared to prior quarter.

    European Premium
    $310up $80
    Q1 FY26

    Compared to prior quarter.

    Cash Balance
    $332 million
    as of March 31, 2026

    Including cash proceeds from Hawesville sale.

    Net Debt
    $220 milliondeclined
    as of March 31, 2026

    Paid down $8 million of industrial revenue bonds using Hawesville proceeds.

    45X Tax Credits Receivable
    $198 million
    as of March 31, 2026

    For full year 2023, 2025, and Q1 2026 U.S. production.

    2025 45X Tax Credit Expected
    $94 million
    full year 2025

    Expected to be received in the next few months after filing the full year '25 tax return.

    Insurance Recoveries Received to Date
    $83 million
    to date

    Includes an additional $46 million advance received in early April, not reflected in Q1 results.

    Insurance Recoveries Lag
    $38 million
    Q1 FY26

    Insurance recoveries trailed claims by $38 million in Q1, primarily due to timing. Payments are expected to lag 1 to 2 quarters behind submitted claims.

    Semi-annual interest payments
    $14 million
    Q1 FY26

    Related to senior secured notes and hedge settlements.

    Working Capital
    increased
    Q1 FY26

    Due to higher pricing and timing of payments on major raw materials and customer receipts.

    Expected Realized LME
    $3,175up from Q1
    Q2 FY26

    Lagged LME expected to be up across all components.

    Expected Lagged U.S. Midwest Premium
    $2,450up from Q1
    Q2 FY26

    Lagged premiums expected to be up across all components.

    Expected Lagged European Duty Paid Premium
    $485up from Q1
    Q2 FY26

    Lagged premiums expected to be up across all components.

    Revenue Components Impact on Q2 Adjusted EBITDA
    $85 million to $95 millionincrease vs Q1
    Q2 FY26

    Combined impact from lagged LME and delivery premium changes.

    U.S. Energy Prices Impact on Q2 Adjusted EBITDA
    $15 millionimprovement from Q1
    Q2 FY26

    As power prices moderated after Winter Storm Fern.

    Raw Materials Impact on Q2 Adjusted EBITDA
    $10 millionheadwind sequentially
    Q2 FY26

    Expected increases in coke, pitch, and caustic prices, and Jamalco cost/volume headwinds from lower bauxite quality.

    Operating Expenses Impact on Q2 Adjusted EBITDA
    $15 million to $20 millionincrease sequentially
    Q2 FY26

    In part to match increased production at Mt. Holly and Grundartangi, and additional seasonal costs for summer help.

    Volume and Sales Mix Impact on Q2 Adjusted EBITDA
    $15 million to $20 millionimprovement sequentially
    Q2 FY26

    As incremental Mt. Holly volume ramps up. Full run rate volume impact from Mt. Holly and Grundartangi not until Q3.

    Global Aluminum Deficit
    1.4 million tonsexpanded
    2026

    Expanded due to Middle Eastern disruption.

    Middle East Production Disruption
    2.5 million tons
    estimated

    Disrupted by either production curtailments due to raw material shortages (Strait of Hormuz closure) or direct Iranian drone and missile attacks.

    Industry KPIs

    3
    MetricValueDetails
    Safetystrong
    Ore grade recovery drilling by depositlower quality
    Production sales volume by metal and by mine123,000 tonstons

    Deals & partnerships

    1
    Emirates Global Aluminum (EGA)Development of the Oklahoma smelter project.

    Century and EGA are advancing the Oklahoma smelter project, retaining Bechtel for engineering work, progressing power discussions, and making significant progress on financing discussions. Final investment decision and groundbreaking are expected by year-end.

    Capital programs

    4
    Mt. Holly Expansion Projectunderway
    Period spend: $71 million

    Benefit: 230,000 metric tons total production; nearly 10% increase in U.S. primary aluminum production

    The team started the first pots 3 weeks ago, and the start-up is progressing on schedule. This project will add over 125 full-time U.S. manufacturing jobs. Expected to fully repay its capital cost by the end of 2026. The $71 million spend is combined with Grundartangi restart and Jamalco TG4.

    Grundartangi Potline 2 Restartunderway
    Period spend: $71 million
    Start: April 23

    Benefit: return to nearly full production

    Restarted the first pots on Line 2 on April 23. The plant will run on a slightly reduced amperage until new replacement transformers are installed in the fourth quarter. The $71 million spend is combined with Mt. Holly expansion and Jamalco TG4.

    Jamalco Steam Generation Turbine (TG4)underway
    Period spend: $71 million

    Commissioning of its new steam generation turbine is expected to be completed later this quarter. The $71 million spend is combined with Mt. Holly expansion and Grundartangi restart.

    Oklahoma Smelter Projectannounced
    Funding: DOE grant; financing discussions

    Benefit: 750,000 metric tons; more than double total U.S. aluminum production; restore domestic production of military-grade high-purity aluminum

    Joint venture with Emirates Global Aluminum (EGA). Retained Bechtel to complete the next stage of engineering work. Advancing power discussions and financing discussions. A $500 million DOE grant is confirmed to reduce the overall capital cost. Final investment decision and groundbreaking expected by the end of the year.

    Risks & headwinds

    5
    Middle East Production Disruptions2026

    approximately 2.5 million tons of production disrupted; 2026 global deficit expanded to 1.4 million tons

    Mitigation: Century is supporting existing U.S. customers with Mt. Holly expansion tons to repair strained supply lines.

    Higher Energy Prices (Sebree)Q1 FY26

    null

    Mitigation: Power prices moderated after Winter Storm Fern; expected to improve by $15 million in Q2.

    Input Cost PressuresQ1 FY26, Q2 FY26

    $10 million headwind sequentially in Q2

    Mitigation: HFO hedge book offset some impact; company is managing input costs.

    Jamalco Bauxite QualityQ1 FY26, Q2 FY26

    null

    Mitigation: In process of adjusting mining plan accordingly.

    Insurance Recovery LagQ1 FY26, ongoing

    $38 million in Q1

    Mitigation: Received $46 million advance in early April; total $83 million received to date. Payments are expected to lag 1 to 2 quarters behind submitted claims.

    What to watch in Q2 FY26

    5

    Mt. Holly Expansion Completion

    end of June
    CurrentFirst pots started, progressing on schedule
    TargetFull expansion online

    Why it matters

    This project will significantly increase U.S. primary aluminum production and profitability for Century.

    At Mt. Holly, the team started the first pots 3 weeks ago, and the start-up is progressing on schedule to bring the full expansion project online by the end of June.

    Q&A highlights

    6

    Has Century gained market share due to Middle East disruptions, and has the Oklahoma project scope changed due to these events?

    Century prioritized filling existing customer needs with Mt. Holly tons and unallocated metal. The market has been orderly. Conversations with EGA for the Oklahoma smelter are 'full go' with no change in interest or commitment from either party.

    “So we've been able to do a good job with that, again, prioritizing our existing customers first; and second, working with new customers where we have excess metal to do that. All in all, I'd say the market has been orderly and -- but it's really been helped by those additional Mt. Holly tons to fill in where needed.”

    asked by Nick Giles · answered by Jesse Gary

    2 min read6 chapters

    Detailed Narrative

    01

    Dynamic Global Aluminum Market

    The global aluminum market is experiencing significant dynamism due to strong demand from lightweighting, electrification, power/data infrastructure, commercial aviation, and defense. U.S. demand for value-added products is increasing following President Trump's executive order closing Section 232 loopholes. Middle East production disruptions, estimated at 2.5 million tons, have expanded the 2026 global deficit to 1.4 million tons, creating a healthy environment for Century.

    02

    Mt. Holly Expansion Progress

    The Mt. Holly expansion project started its first pots three weeks prior to the call and is progressing on schedule to bring the full expansion online by the end of June. This project will increase Mt. Holly's total production to approximately 230,000 metric tons, adding over 125 U.S. manufacturing jobs and nearly 10% to total U.S. primary aluminum production. The project is expected to fully repay its capital cost by the end of 2026.

    03

    Grundartangi Restart

    The restart of Potline 2 at Grundartangi began on April 23 and is on schedule to restore all pots by the end of July. The plant will return to nearly full production, running on slightly reduced amperage until new replacement transformers are installed in Q4. This restart, along with Mt. Holly, brings significant production back into a disrupted market.

    04

    Oklahoma Smelter Project Advancement

    Century and Emirates Global Aluminum (EGA) are advancing the Oklahoma smelter project, retaining Bechtel for engineering work, progressing power discussions, and making significant progress on financing. A final investment decision and groundbreaking are expected by year-end. The 750,000 metric ton smelter will more than double total U.S. aluminum production and restore domestic military-grade high-purity aluminum production.

    05

    Financial Performance and Outlook

    Q1 net sales reached $649 million, driven by higher LME prices and regional premiums despite lower shipment volumes. Adjusted EBITDA was $231 million, up $60 million sequentially. For Q2, realized LME and premiums are expected to increase, contributing an $85 million to $95 million increase to Adjusted EBITDA, with total Q2 Adjusted EBITDA projected between $315 million and $335 million.

    06

    Capital Allocation and Liquidity

    The company's cash balance stood at $332 million, and net debt declined to $220 million, below the target of $300 million. Q1 CapEx was $76 million, primarily for Mt. Holly and Grundartangi projects. The company expects to receive $94 million in 2025 45X tax credits and additional insurance recoveries, further improving its cash position.

    AI-generated summary of the company’s earnings call. Not investment advice.