Century Aluminum Company reported a net loss of $9.7 million ($0.11 per basic and diluted common share) for the fourth quarter of 2013.
In a release on Feb. 20, the Company said cost of sales for the quarter included a benefit of $16.6 million related to deferred power contract liability amortization and a $9.0 million benefit related to lower of cost or market inventory adjustments. The financial results also included an $8.4 million charge relating to the separation of its former chief executive officer. For the fourth quarter of 2012, the company reported a net loss of $6.9 million ($0.08 per basic and diluted common share).
For 2013, the company reported a net loss of $40.3 million ($0.45 per basic and diluted common share). Financial results were positively impacted by a $31.0 million benefit for deferred power contract liability amortization and an unrealized gain of $16.8 million, primarily related to an LME-based contingent obligation. In addition, the company recorded a gain on bargain purchase of $5.3 million related to the Sebree acquisition. The company also incurred office relocation costs of $5.8 million, a loss on early extinguishment of debt of $3.3 million and an $8.4 million charge relating to the separation of our former chief executive officer.
In 2012, the company reported a net loss of $35.6 million ($0.40 per basic and diluted common share). Financial results were negatively impacted by an unrealized net loss on forward contracts of $3.0 million, primarily related to the mark to market of aluminum price protection options. Results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales included a $19.8 million benefit for lower of cost or market inventory adjustments.
Sales for the fourth quarter of 2013 were $401.2 million compared with $317.7 million for the fourth quarter of 2012. Shipments of primary aluminum for the 2013 fourth quarter were 216,755 tonnes (which includes 50,395 tonnes from the Sebree operation acquired June 1, 2013), compared with 162,303 tonnes shipped in the year-ago quarter. Sales for 2013 were $1,454.3 million compared with $1,272.1 million for 2012, and total 2013 primary aluminum shipments of 764,598 tonnes (including 113,948 tonnes from the Sebree operation), compared with 646,529 tonnes shipped in 2012.
"The last several months closed out what we believe was a successful and forward-looking year for Century," said Michael Bless, President and Chief Executive Officer. "Most recently, the approval by the Kentucky Public Service Commission of the market- based power contract for Sebree will allow long-term investment in this excellent plant. This action follows the favorable outcome for Hawesville in August. Employees at both smelters worked safely and productively through uncertain times, and their perseverance and dedication produced these gratifying results. Each plant is presently operating at high levels of efficiency and is producing a record amount of value-added products, for which we continue to see strong U.S. market demand. The Grundartangi team had another safe and productive year, as they restarted the anode plant in Vlissingen and continued on pace with the hot metal capacity expansion program; both projects are on time and under budget. We have aggressive plans for the future development of this world class smelter, which we believe is in an excellent position to capitalize on strong demand and shrinking supply in key European markets.
"We expect 2014 to be a dynamic year for the company," continued Bless. "Markets are presently exhibiting significant uncertainty due to a variety of well publicized factors. Our industry is highly susceptible to these trends in the short-term. However, our confidence in more attractive future market conditions has only increased, due to a continuation of plant closures in our geographic markets and a favorable demand scenario in which our plants are well positioned to participate. In this context, we will focus on several priorities. In Kentucky, we must find a solution to risks associated with reliable power transmission created by the de-energizing of lines during periods of grid maintenance. At Mt. Holly, we are working with our partner and with the state of South Carolina to create an acceptable post-2015 power arrangement. We remain absolutely and resolutely committed to reopening our smelter at Ravenswood, West Virginia, and are working hard on a number of processes to this end. Likewise, in Iceland, we continue to work with numerous constituencies to seek a way forward for the Helguvik project; we are more convinced than ever that, due to the development of European markets, this plant will be an attractive investment for our shareholders and a favorable development for Iceland's economy."
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Chicago, Ill.
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