July 23, 2009

Century Aluminum Reports Second Quarter 2009 Results

MONTEREY, CA, Jul 23, 2009 (MARKETWIRE via COMTEX News Network) -- Century Aluminum Company (NASDAQ: CENX) 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.

Century Aluminum's quarterly conference call is scheduled for 5:00 p.m. Eastern time today. To listen to the conference call and to view related presentation materials, go to www.centuryaluminum.com and click on the conference call link on the homepage.

Cautionary Statement

This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future; however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.

                         Century Aluminum Company
                  Consolidated Statements of Operations
                 (in Thousands, Except Per Share Amounts)
                                (Unaudited)
                              Three months ended       Six months ended
                                   June 30,                June 30,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
                                            As                      As
                                         Adjusted                Adjusted
NET SALES:
  Third-party customers     $  140,097  $  420,032  $  310,511  $  776,925
  Related parties               49,056     125,165     103,229     239,414
                            ----------  ----------  ----------  ----------
                               189,153     545,197     413,740   1,016,339
COST OF GOODS SOLD             194,380     388,973     491,328     764,120
                            ----------  ----------  ----------  ----------
GROSS PROFIT (LOSS)             (5,227)    156,224     (77,588)    252,219
OTHER OPERATING EXPENSES -
 CURTAILMENT COSTS               9,166           -      33,498           -
SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES        11,271      13,851      21,391      32,717
                            ----------  ----------  ----------  ----------
OPERATING INCOME (LOSS)        (25,664)    142,373    (132,477)    219,502
INTEREST EXPENSE - Net          (7,625)     (5,699)    (14,943)    (11,208)
INTEREST INCOME -
 AFFILIATES                        144           -         286           -
NET LOSS ON FORWARD
 CONTRACTS                      (3,268)   (203,784)     (6,870)   (652,092)
OTHER INCOME (EXPENSE) -
 Net                               586         306         344        (227)
                            ----------  ----------  ----------  ----------
LOSS BEFORE INCOME TAXES
 AND EQUITY
IN EARNINGS OF JOINT
 VENTURES                      (35,827)    (66,804)   (153,660)   (444,025)
INCOME TAX BENEFIT
 (EXPENSE)                      (2,573)     57,744       1,523     196,635
                            ----------  ----------  ----------  ----------
LOSS BEFORE EQUITY IN
 EARNINGS OF JOINT VENTURES    (38,400)     (9,060)   (152,137)   (247,390)
EQUITY IN EARNINGS OF JOINT
 VENTURES                        4,488       5,566       3,601       9,959
                            ----------  ----------  ----------  ----------
NET LOSS                    $  (33,912) $   (3,494) $ (148,536) $ (237,431)
                            ==========  ==========  ==========  ==========
LOSS PER COMMON SHARE
  Basic and Diluted         $    (0.46) $    (0.08) $    (2.14) $    (5.78)
WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING
  Basic and Diluted             74,143      41,143      69,402      41,092
                         Century Aluminum Company
                        Consolidated Balance Sheets
                          (Dollars in Thousands)
                                (Unaudited)
                                                  June 30,    December 31,
ASSETS                                              2009          2008
                                                ------------  ------------
Current Assets:                                               As Adjusted
  Cash                                          $    230,031  $    129,400
  Restricted cash                                        865           865
  Short-term investments                                   -        13,686
  Accounts receivable - net                           34,609        60,859
  Due from affiliates                                 14,063        39,062
  Inventories                                        126,832       138,111
  Prepaid and other current assets                    19,901        99,861
  Deferred taxes - current portion                         -        32,290
                                                ------------  ------------
    Total current assets                             426,301       514,134
Property, plant and equipment - net                1,319,899     1,340,037
Intangible asset - net                                24,453        32,527
Due from affiliates - less current portion             7,599         7,599
Other assets                                         164,688       141,061
                                                ------------  ------------
    Total                                       $  1,942,940  $  2,035,358
                                                ============  ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable, trade                       $     66,344  $    102,143
  Due to affiliates                                   64,023        70,957
  Accrued and other current liabilities               61,262        58,777
  Accrued employee benefits costs - current
   portion                                            12,070        12,070
  Convertible senior notes                           156,704       152,700
  Industrial revenue bonds                             7,815         7,815
                                                ------------  ------------
    Total current liabilities                        368,218       404,462
                                                ------------  ------------
Senior unsecured notes payable                       250,000       250,000
Revolving credit facility                                  -        25,000
Accrued pension benefit costs - less current
 portion                                              45,307        50,008
Accrued postretirement benefits costs - less
 current portion                                     161,803       219,539
Other liabilities                                     41,757        33,464
Deferred taxes                                        65,252        71,805
                                                ------------  ------------
    Total noncurrent liabilities                     564,119       649,816
                                                ------------  ------------
Shareholders' Equity:
  Preferred stock (one cent par value, 5,000,000
   shares authorized; 153,491 shares outstanding
   at June 30, 2009 and 155,787 at December
   31, 2008)                                               2             2
  Common stock (one cent par value, 195,000,000
   shares authorized; 74,158,900 shares
   outstanding at June 30, 2009 and 49,052,692
   at December 31, 2008)                                 742           491
  Additional paid-in capital                       2,378,436     2,272,128
  Accumulated other comprehensive loss               (65,708)     (137,208)
  Accumulated deficit                             (1,302,869)   (1,154,333)
                                                ------------  ------------
    Total shareholders' equity                     1,010,603       981,080
                                                ------------  ------------
    Total                                       $  1,942,940  $  2,035,358
                                                ============  ============
                        Century Aluminum Company
                  Consolidated Statements of Cash Flows
                          (Dollars in Thousands)
                               (Unaudited)
                                                      Six months ended
                                                          June 30,
                                                      2009         2008
                                                  -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:                          As Adjusted
  Net loss                                        $  (148,536) $  (237,431)
  Adjustments to reconcile net loss to net cash
   provided by operating activities:
     Unrealized net loss on forward contracts           2,514      536,650
     Accrued plant curtailment costs                   21,051            -
     Depreciation and amortization                     40,063       41,860
     Lower of cost or market inventory adjustment     (38,187)           -
     Deferred income taxes                             25,030     (195,874)
     Pension and other postretirement benefits          7,495        8,513
     Stock-based compensation                           1,269       11,658
     Excess tax benefits from share based
      compensation                                          -         (657)
     Undistributed earnings of joint ventures          (3,601)      (9,959)
     Change in operating assets and liabilities:
       Accounts receivable - net                       26,250       (1,042)
       Purchase of short-term trading securities            -      (97,532)
       Sale of short-term trading securities           13,686      345,764
       Due from affiliates                             24,999       (6,595)
       Inventories                                     31,140      (30,212)
       Prepaid and other current assets                77,891      (20,821)
       Accounts payable, trade                        (24,768)      16,693
       Due to affiliates                              (11,435)       7,726
       Accrued and other current liabilities           (7,109)      (5,544)
       Other - net                                      8,920        1,616
                                                  -----------  -----------
     Net cash provided by operating activities         46,672      364,813
                                                  -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment           (11,927)     (14,956)
  Nordural expansion                                  (12,132)     (32,648)
  Investments in and advances to joint ventures        (1,023)     (27,621)
  Restricted and other cash deposits                        -       (1,898)
                                                  -----------  -----------
     Net cash used in investing activities            (25,082)     (77,123)
                                                  -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment under revolving credit facility           (25,000)           -
  Excess tax benefits from share based
   compensation                                             -          657
  Issuance of common stock - net                      104,041        2,335
                                                  -----------  -----------
     Net cash provided by financing activities         79,041        2,992
                                                  -----------  -----------
NET CHANGE IN CASH                                    100,631      290,682
CASH, BEGINNING OF THE PERIOD                         129,400       60,962
                                                  -----------  -----------
CASH, END OF THE PERIOD                           $   230,031  $   351,644
                                                  ===========  ===========
                         Century Aluminum Company
                          Selected Operating Data
                                (Unaudited)
                       SHIPMENTS - PRIMARY ALUMINUM
                         Direct (1)                       Toll
                ----------------------------- -----------------------------
                 Metric     (000)              Metric     (000)     (000)
                  Tons     Pounds    $/Pound    Tons     Pounds    Revenue
                --------- --------- --------- --------- --------- ---------
2009
2nd Quarter        76,817   169,353 $    0.69    68,876   151,846 $  72,136
1st Quarter        97,392   214,712 $    0.72    68,096   150,126 $  71,048
2008
2nd Quarter       131,639   290,214 $    1.37    66,533   146,681 $ 147,128
1st Quarter       133,004   293,223 $    1.17    66,717   147,086 $ 127,177
(1) Does not include Toll shipments from Nordural

Contacts:
Mike Dildine (media)
831-642-9364
Shelly Lair (investors)
831-642-9357

Certified Advisors for the First North market of the OMX Nordic Exchange
Iceland hf. for Global Depositary Receipts in Iceland:
Helga Gunnarsdottir
Director-Corporate Finance
NBI hf.
Astros Vidarsdottir
Senior Manager-Corporate Finance
NBI hf.


SOURCE: Century Aluminum Company


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