Century Aluminum Company Reports Robust Fourth Quarter and Full Year 2025 Earnings

Key Financial and Strategic Developments for Investors

Financial Highlights

• Q4 2025 Results:
  • Net sales rose slightly to \$633.7 million.
  • Reported net income attributable to Century stockholders was \$1.8 million (\$0.02 per diluted share).
  • Adjusted net income surged to \$128.2 million (\$1.25 per share).
  • Adjusted EBITDA of \$170.6 million, a significant sequential improvement.
  • Cash and cash equivalents at year-end totaled \$134.2 million, with strong liquidity of \$418.0 million.
• Full Year 2025 Results:
  • Net sales reached \$2.5 billion, up \$307.6 million from 2024 mainly due to higher realized aluminum prices.
  • Reported net income was \$41.8 million (\$0.42 per diluted share), a decrease of \$295.0 million from 2024.
  • Adjusted net income of \$253.8 million (\$2.46 per share), up \$152.4 million year-on-year.
  • Adjusted EBITDA totaled \$425.1 million, an improvement of \$180.9 million.

Operational and Strategic News

• New U.S. Smelter Project:
  Century announced in January 2026 a joint development agreement with Emirates Global Aluminium (EGA) to build a new smelter in Oklahoma, marking the first new primary aluminum smelter in the U.S. since 1980. This is highly price sensitive as it signals significant growth and potential federal support, including expectations for \$500 million DOE funding, additional grants, incentives, loans, and equity funding. Investors should monitor regulatory and financing developments closely, including the likelihood of formalizing a joint venture structure and securing power arrangements.
• Asset Sale and Redevelopment:
  In February 2026, Century announced the sale and redevelopment of the previously curtailed Hawesville smelter. The site will host a new data center, with Century retaining a minority interest. The timing and ability to monetize this interest could impact future earnings and share value.
• Mt. Holly Restart:
  Announced plans to restart over 50,000MT of idled production by the end of Q2 2026, which is expected to favorably impact volumes and costs in upcoming quarters. Investors should watch for updates on the restart progress, costs, and operational benefits.

Exceptional Items and Risks

• Exceptional Charges:
  Q4 and full year results were heavily impacted by exceptional items totaling \$126.4 million in Q4 and \$213.8 million for the year. Notable items include:
  • \$30.9 million (Q4) and \$37.3 million (full year) related to equipment failure at Iceland’s Grundartangi facility.
  • \$32.6 million in share-based compensation (Q4), \$47.0 million for full year.
  • \$27.6 million (Q4) and \$62.8 million (full year) unrealized losses on forward derivative contracts.
  • \$5.7 million related to hurricane impacts at Jamalco.
  • \$9.9 million Hawesville inventory write-down.
  • Mt. Holly restart costs (\$8.0 million in Q4, \$8.5 million full year).
  • \$10.5 million lower cost or net realizable value inventory adjustment (full year).

  These charges significantly affect GAAP results but are excluded from adjusted figures. Investors should monitor insurance recoveries and further exceptional charges, as these may impact future quarters.

• Production and Shipping Disruptions:
  Shipments of primary aluminum decreased 14% sequentially in Q4 due to Icelandic facility equipment failure and 5% for the full year. These disruptions contributed to lower reported net income and are important for investors assessing operational risk and recovery timelines.
• Forward-Looking Risks:
  The company provided extensive forward-looking statements regarding market conditions, aluminum prices, raw material and power costs, geopolitical risks (including wars in Ukraine and the Middle East), insurance recoveries, and regulatory/tax developments. Investors should be aware of uncertainties, especially regarding new smelter financing, operational recovery, and the impact of trade actions or sanctions.
• Liquidity and Debt:
  Liquidity remains strong at \$418 million, but Century undertook significant debt refinancing in 2025, including issuing new Senior Notes and repaying prior notes. Investors should monitor debt levels and refinancing risks.

First Quarter 2026 Outlook

• Century expects Q1 2026 adjusted EBITDA to range between \$215 to \$235 million, driven by improved metal pricing and regional premiums but partially offset by temporary higher U.S. energy costs due to Winter Storm Fern.

Non-GAAP Measures and Accounting Changes

• Century uses adjusted net income, adjusted earnings per share, and adjusted EBITDA to facilitate period-to-period comparisons excluding items not indicative of ongoing operations.
• Recent changes include full consolidation of Jamalco joint venture assets, which does not impact net income attributable to Century stockholders or non-GAAP metrics.

Important Shareholder Considerations

• Growth Opportunities: The new Oklahoma smelter project and Mt. Holly restart signal major expansion and potential for revenue growth, which could move share prices positively.
• Asset Monetization: Sale and redevelopment of Hawesville smelter, including the data center project, could provide new income streams and value realization.
• Exceptional Charges and Recovery: Continued exposure to operational disruptions, insurance recoveries, and exceptional charges may add volatility to earnings and share price.
• Debt and Liquidity: Significant refinancing activities and strong liquidity position are critical for funding growth and managing risk.
• Market Risks: Ongoing risks from commodity prices, energy costs, geopolitical events, and regulatory changes are highly relevant for shareholders.

Conclusion

Century Aluminum’s Q4 and full year 2025 results showcase a company in transition, with strong underlying earnings, major strategic growth initiatives, and a series of exceptional charges that have distorted reported GAAP earnings. The new smelter project, asset sales, and restart activities are all highly price-sensitive and could significantly affect share value as they progress. Investors should closely monitor updates on project developments, insurance recoveries, operational disruptions, and debt management going forward.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should perform their own due diligence and consult with financial professionals before making any investment decisions. The forward-looking statements in this article are based on management’s current expectations and are subject to risks and uncertainties.

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