Will the seasonal portion of Q2 OpEx increase reverse in Q3?

Yes, the seasonal portion (related to summer help and training) will partially reverse in Q3, but the full $15M-$20M increase will not reverse as some is tied to increased production from Mt. Holly. “As I was saying, typically around this time of year, when we look across our footprint, we tend to have seasonality in our operating expenses, mainly around getting some summer help in the door and training that goes along with that. So you see those costs in our Q2 guide. And then coming out of the summer into Q3 and out of the summer months, we'll sort of reverse back to our normalized run rate of operating expenses.”

What is the incremental potential for Q3 EBITDA if current spot prices hold and Mt. Holly/Grundartangi are fully operational?

Current spot prices (LME, U.S. Midwest, European premiums) are higher than Q2 realized prices. This could add $70M-$75M to EBITDA from these three components alone. With full Mt. Holly uplift, a $400M quarterly run rate is a good estimate, plus additional uplift from Mt. Holly. “So if you just, again, traditionally, we refer to the sensitivities in the back. And if you look at those quick math, I think that's in the $70 million to $75 million range for just those 3 revenue components. So again, if you took the Q2 guide midpoint, $325 million and you sort of mark at the spot, you can see a $400 million quarterly run rate level, but that doesn't include the full impact we will have and expect in Q3 from the full Mt. Holly uplift.”

Is there potential for capital returns to shareholders this year if the market holds?

Yes, the company has met liquidity and net debt targets. Priority is sustaining CapEx and high-return organic investments (Mt. Holly, Grundartangi). Once these investments are largely complete by end of Q2, and with expected 45X tax credits and insurance recoveries, the company will look at capital returns after funding organic growth. “As you know, our priority first will be to fund more high-return organic investments. But otherwise, we'll definitely look at capital returns.”

CENX

Century Aluminum Company (CENX) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Materials· May 7, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Adjusted EBITDA	$315 million to $335 million high materiality	Q2 · FY26	High
Oklahoma Smelter Project Final Investment Decision and Groundbreaking	by the end of the year high materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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	—	—	—	—

CENX operating KPIs by quarter

CENX operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Shipments	~123K tons Q1 shipments totaled approximately 123,000 tons, down sequentially due to Line 2 in Iceland being offline for the full quarter following its idling in late October 2025. Source: earnings call transcript	~131K tons On a consolidated basis, second quarter shipments totaled approximately 131,000 tonnes, a 6% increase from the prior quarter due to additional production from the restart of Line 2 in Iceland and the Mt. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

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

Mt. Holly Expansion Project underway

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 Restart underway

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 Project announced

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

Middle East Production Disruptions 2026

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 Pressures Q1 FY26, Q2 FY26

$10 million headwind sequentially in Q2

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

Jamalco Bauxite Quality Q1 FY26, Q2 FY26

null

Mitigation:In process of adjusting mining plan accordingly.

Insurance Recovery Lag Q1 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

Mt. Holly Expansion Completion

end of June

Current First pots started, progressing on schedule

Target Full 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.

Find out whether CENX delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.