Good afternoon. Thank you for joining today's Century Aluminum Company First Quarter Earnings Call. My name is Tania, and I will be your moderator. I would now like to pass the conference over to our host, Peter Trpkovski with Century Aluminum. Please go ahead.

Thank you, Tania. Good afternoon, everyone, and welcome to the conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer; and Shelly Harrison, Senior Vice President of Finance and Treasurer. After our prepared comments, we'll be happy to take your questions. As a reminder, today's presentation is available on our website at www.centuryaluminum.com. We use our website as a means of disclosing material information about the company and for complying with Regulation FD. Turning to Slide 1. Please take a moment to review the cautionary statement shown here with respect to forward-looking statements and non-GAAP financial measures contained in today's discussion. And with that, I'll hand the call to Jesse.

Thanks, Pete. Thanks to everyone for joining. I'll start today by reviewing the highlights from our record first-quarter results and then discussing the constructive market conditions in which we are operating. Shelly will then take you through the details of the first quarter results and provide some insight on our expectations for Q2. I'll finish with a review of the status of the Grundartangi casthouse project and our progress towards our capital allocation targets. Okay. Starting on Page 3, we're very pleased to announce that we achieved record quarterly adjusted EBITDA of over $105 million in the first quarter, a 30% increase over Q4. This was matched with a 14% increase in net sales for the quarter. This performance is a reflection of the hard work completed by our Century teams across locations over the past several years, bringing on additional production and increasing our proportion of value-added products. We are very pleased to be seeing the returns from these past investments come to fruition. To that end, our quarterly shipments increased by 5% from Q4, reflecting our highest level since 2015. The increase was mostly driven by our expansion projects at both Mt. Holly and Hawesville, both of which are now substantially complete. We should expect additional volume gains of about 10,000 metric tons in Q2, as the newly restarted pots in Mt. Holly produce over a full quarter and pots back online at Grundartangi. We achieved these production levels despite power curtailments in Iceland, decreasing Grundartangi shipments by approximately 3,000 metric tons in the quarter. As discussed on our last call, these curtailments were driven by low reservoir levels in Iceland, which have now begun to refill and return to more normal levels. The power curtailments ended earlier this month, and we are currently in the process of putting 36 curtailed pots back into production. We expect the smelter to return to full production sometime in May. Please note that with these pots returning to production, we will have a one-time increase in our relining costs reflected in Q2 OpEx, which should not continue in future quarters. Shelly will cover the details on this in a bit. Across our assets, we remain focused on consistent and cost-disciplined operations. Over the past year, we've made significant progress improving the stability and consistency of our smelters, which allows us to operate as efficiently as possible. Grundartangi's steady execution through the first quarter power curtailment is a good example of this. In the US, the teams increased shipments over 13,000 metric tons, despite dealing with continued stressed supply chains that resulted in the deferral of several major maintenance projects previously scheduled for the quarter. This deferral, along with the deferred top line in Grundartangi I discussed earlier, resulted in approximately $15 million in OpEx cost savings in Q1 that will now be pushed into Q2. Finally, I'd like to take a moment to commend our operators across our assets for the significantly improved safety performance over the quarter. Safety is a core value for Century, and we work hard to improve each and every day. All of our employees are proud of the progress they've made. Okay. Turning to page 4. You can see the market fundamentals for our business remain robust. We continue to forecast that the global aluminum market will remain in an over 1 million-ton deficit in 2022, with the shortfall being increasingly centered in our markets in the US and Europe, where we are forecasting a 4.3 million tonne deficit in the US and a 3.7 million tonne deficit in Europe for the year. Global deficits have shifted west as Chinese smelters have begun to restart capacity in Unan and Quanzhi that was curtailed over the winter. These restarts appear to be progressing in line with our expectations. In the West, however, production growth is nearly at a halt, as there have not been any further restarted announcements, and previously announced restarts in Brazil and elsewhere have experienced delays due to supply chain disruptions and other events. We do not foresee any new research in Europe over the next few years, which instead remains at risk of further curtailment as energy prices in remaining production countries continue to price above $250 per megawatt into 2024. Western inventories have continued to decline with LME stocks reaching their lowest level since 2005. Compared with continued high freight costs across the world, these dynamics continue to support strong regional premiums in the US and Europe, where the European duty-paid premium has reached record highs of $610 per metric ton, and the Midwest premium remains in a record high of $870 per metric ton. Our geographic footprint with the short supply chains into both of these markets continues to improve our advantages in capturing these premiums. Turning to page 5. You can see that the LME price of aluminum remains strong in Q1, with LME prices averaging $3,327 in the first quarter and averaging that same price so far in Q2. On the demand side, we have experienced strong demand for all of our products year-to-date. We continue to expect World ex-China demand growth to land between 2.5% and 3.5% as we discussed in March. Our US market remains especially robust, which we expect will outpace Europe for the year. While the war in Ukraine remains the risk to European growth, we have not experienced any significant war-related demand destruction to date. Supply and demand remains another highlight, with premiums at all-time highs as we enter Q2. In addition, our build customers continue to order and add new extrusion presses, which we believe will underpin continued build-of-demand growth for the long term. Given the strength of the US build market, we have decided to move forward with several debottlenecking projects in Sebree and Mt. Holly. We expect the first phases of these projects should be completed by the end of 2022 and should increase build capacity by over 10,000 metric tons in 2023 and beyond. With these projects, along with other smaller investment projects across our assets, we now expect 2022 investment CapEx to be about $10 million for the year. These are all very quick payback projects and fall within our return requirements. On the cost side, we saw continued upward pressure across key inputs with a notable exception of recent weakness in the alumina price. The most significant of these increases have been in energy prices. Although, first quarter energy prices taken as a whole were relatively flat from Q4 levels, we have more recently seen significant price increases in MISO, driven by high global coal prices and spiking US natural gas prices, which seem to be driven by lower-than-average US storage levels and strong US industrial demand. While these markets remain dynamic and continue to trade in significant backwardation, we now expect higher US energy prices over Q2 by about $25 per megawatt. Shelly will walk you through the expected impact for Q2. Coke and pitch prices also continued to increase so far during the second quarter, each increasing about 17% over Q1. We are well-supplied for both materials, but this is one area that has been impacted by the war in Ukraine, which is the supplier of feedstock for both commodities. On the other hand, alumina has been much more constructive this month after peaking at $530 per metric ton immediately following the curtailment of the Ukrainian aluminum refinery due to the war. The early concern following the closure of the Nikolaos refinery appears to have been misplaced, as the market seems to be well-supplied with spodumene trading about $370 per metric ton today. As a reminder, aluminum prices flow through our results on a three to four-month lag, which means that Q2 realized alumina prices are expected to be flat quarter-over-quarter. We then will expect to benefit from current low pricing beginning in Q3. Shelly will now walk you through the financial results.

Thanks, Jesse. Let's turn to slide 6, and I'll take you through the results for the quarter. On a consolidated basis, Q1 shipments were up about 5% quarter-over-quarter, primarily driven by Mt. Holly as the restart project is now substantially complete. Realized prices were up 8% compared to the prior quarter as a result of higher lagged LME prices and value-added product premiums. The combination of higher shipments and realized selling prices drove a 14% increase in sequential net sales. Looking at operating results, adjusted EBITDA was $105 million in Q1, and adjusting items this quarter included $3.3 million for share-based compensation. Liquidity from available cash and credit facilities was $154 million at the end of Q1, which is a $54 million increase from the prior quarter. Turning to slide 7. Here, we'll go through the $23 million sequential increase in adjusted EBITDA. As we forecast on our last call, the Q1 realized LME of $2,762 a ton was up $158 versus the prior quarter, while realized Midwest and European delivery premiums were relatively flat at $0.32 per pound and $343 a ton, respectively. Indian power prices in Q1 averaged $50 a megawatt hour, which is down about 9% versus Q4, while Nord Pool prices averaged $122 per megawatt hour or up 11% versus the prior quarter. The impact of these two changes roughly offset each other. Lagged alumina index prices were up $85 per ton versus the prior quarter, and coke and pitch prices continued their upward trend, which realized prices increasing about 15% for each. Value-added premiums added $15 million to Q1 EBITDA as we're now benefiting from higher billet prices in our Cal-22 contract. Lastly, we had a volume benefit of about $8 million related to higher shipments as well as a $15 million benefit from lower operating costs in Q1. As Jesse mentioned, the operating cost savings were a result of deferring a number of our planned maintenance projects into Q2 as well as some deferred pot relining at Grundartangi due to the temporary power curtailments that have now been lifted. Okay. Let's turn to slide 8, and we'll take a quick look at cash flow. Our cash position remained relatively flat, going from $29 million at 12/31 to $27 million at 3/31. CapEx spending was $26 million in Q1, with about $10 million of that relating to the restart at Mt. Holly and $10 million related to the Grundartangi casthouse. Cash paid for hedge settlements was $17 million for the quarter. Finally, working capital was also a use of cash in the quarter, as higher volumes and aluminum price increases drove higher receivable values, partially offset by higher payables. Importantly, we were able to hold inventory levels reasonably flat quarter-over-quarter with lower days on hand offsetting the impact of higher prices. Now let's turn to Slide 9, I'll give you some insight into our expectations for the second quarter. For Q2, the lagged LME of $3,160 a tonne is expected to be up about $400 a tonne versus Q1 realized prices. The Q2 lagged Midwest premium is forecast to be $870 a tonne, an increase of 160, and the European delivery premium is expected at $505 per tonne, also an increase of $150 a tonne. Taken together, these aluminum price increases are expected to increase Q2 EBITDA by about $100 million versus Q1 levels. Lagged API-based alumina is expected to be $415 a tonne, which is flat with Q1 prices. While realized alumina prices will remain high for us in Q2, the API has come down significantly, and we expect to see the benefit of lower spot prices in our Q3 results. From a power perspective, factoring in the recent forwards, along with our realized quarter-to-date costs, we expect an overall increase in total energy cost versus Q1, with domestic prices up about 50% and Nord Pool prices relatively flat. This increase in energy costs would equate to about a $45 million decrease in EBITDA versus Q1. This $45 million includes the impact of one month of our new power capacity prices for our Kentucky smelters, which will go into effect on June 1. The capacity price increase reflects roughly a $1 increase per quarter that will fully materialize in Q3. Capacity charges are payable in addition to our base energy costs, and prices are reset by MISO at auction every 12 months. Coke and pitch prices have been on the rise since mid-2021, and we expect that trend to continue with a Q2 increase of about 20% versus the first quarter. These price increases are expected to drive a $15 million EBITDA decrease versus the prior quarter. As Jesse mentioned, we expect an additional 10,000 tonnes in Q2, which will contribute about $10 million of additional EBITDA. Going the other way, we expect a quarter-over-quarter increase in operating expenses of $25 million to $35 million as we complete the maintenance and pot rebuilds that were deferred from Q1. In total, we expect all these items taken together will equate to an approximate EBITDA increase of $15 million to $25 million from Q1 levels for our Q2 results of about $120 million to $130 million. From a hedge standpoint, we expect a realized loss of about $20 million to $25 million in the second quarter, and we expect a tax expense of approximately $10 million. As a reminder, both of these impacts will be below EBITDA geographically and will affect adjusted net income. And with that, I'll turn the call back to Jesse.

Thanks, Shelly. Okay. If you'll turn to Page 10, I'll conclude the call with a quick update on our Grundartangi casthouse project and our capital allocation plans for the year. The casthouse project to Grundartangi is off to a great start with major engineering work completed and material equipment contracts in place. Site work has commenced, and we continue to expect that we'll deliver the project on budget and on schedule, ready-to-sell billets into the 2024 market. Turning to capital allocation, we made good progress towards our liquidity and net debt targets over the quarter, finishing with a liquidity of $154 million in net debt, excluding the Grundartangi casthouse of $388 million. As discussed earlier, we now expect to spend approximately $10 million for the year on an investment CapEx project, primarily relating to the casthouse debottlenecking projects at Sebree in Mt. Holly. Sustaining CapEx for the year should fall within the $30 million to $35 million range we discussed on our Q4 call. Given the constructive market environment, we continue to expect that we will reach our targeted net debt and liquidity levels sometime in the second half of this year. And with that, we'll turn it over to questions.

Thank you. The first question is from Timna Tanners with Wolfe Research. Your line is open.

Yeah. Hey, good afternoon. I wanted to start out and ask some high-level questions. I wanted to get Jesse's thoughts on the aluminum market. It's nice to hear from you, Shelly, I hope you're well. But with the aluminum market, I was interested in your comments on China. I just want a little bit more color on some of the restarts there and if China might be ramping up exports to capitalize on high prices. I know that's a risk is on your take on it? And then just in your comments that there wasn't new capacity coming on in Europe. I think there's a Spanish smelter. We know of restarting and some talk of wind power. So I just thought it would be interesting to get your take on that and further delay on restart commentary?

Sure. Yeah. So in China specifically, after we saw the shutdowns over the winter and early in the fall due to some water and other power tightness issues in China. Of course, we knew that come spring as the reservoirs were filled in Grundartangi that we would start to see some of these restarts, and we have seen those come on, and it's sort of in line with what we had expected. So no real surprise there in terms of supply coming online in China. With respect to exports, I mean, we haven't seen this yet. Of course, they're having issues in the ports and trying to sort through all of the gives and takes there. But we haven't really seen that pressure yet coming into our market, at least. In Europe, of course, there's been some announcements, but they're usually pretty far-dated announcements. But just looking at the four power groups in Europe, you see really heavy energy prices continuing into 2024. And of course, recent news over the past few days with gas supplies in Russia being further curtailed or interrupted. I think that just adds pressure to what can happen in sort of the medium term here.

Okay. Thank you. That's helpful. And then I just wanted to think conceptually based on what we know now and thinking into the second half, so all else equal, which I know is never the case, but alumina prices falling, aluminum prices at these levels, assuming some of these outage costs roll off. What do we think about the second half? And is that a fair way to think about the market? Are there other things around the corner that we know? Or given where we sit today, are there other items that you could flag for us?

I think that's a solid starting point, Timna. The power interruption in Iceland has ended, which means we will be bringing back those tons at Grundartangi. As I stated, this involves around 36 pots, and we are already in that process. By the end of the quarter, we should be operating at essentially the full run rates we shared with you earlier this year. There are some variables to consider, of course. We are facing high energy prices in Europe, which affects us somewhat in Iceland. Remember, we have a Nord Pool link for part of our power, and while 60% of that is hedged, there's still a bit of exposure to Europe. In the US, we're also seeing increased energy costs, primarily due to rising gas prices and some high coal prices. However, these will be partially balanced out by decreasing aluminum prices. So, I think you have a good understanding, but there may be a few more details to consider.

Okay. Super. I'll hand over. Thanks.

Thank you, Ms. Tanners. The next question is from David Gagliano with BMO. Your line is open.

Hi. Thanks for taking my questions. I missed some of the beginning here, I apologize. But can you explain a little bit more or reiterate or rehash the deferred OpEx in the first quarter that's coming back in the second quarter? What was that about again? I missed that part.

Yes, it's primarily on the US side. We're concentrating on bringing Post Mt. Holly online, but we did experience some supply chain disruptions. As a result, we decided to postpone some significant maintenance projects that were planned for the first quarter into the second quarter. There will be no overall increase in annual operating expenditures, just a shift in timing from the first to the second quarter. Additionally, during the Icelandic power interruption, we didn't bring pots online, so when we do bring them on in the second quarter, you will notice a spike in relining costs, which will be a one-time expense for that quarter.

Okay, so I believe you mentioned in your prepared remarks that the deferred amount from Q1 to Q2 on the US side was $15 million, correct?

Yes, there will be $15 in total – including both the Icelandic relining and deferred OpEx from the US.

In Slide 9, the deferred operating expenses for the second quarter amount to a total midpoint increase of $30 million.

That is because when you compare sequentially, David, obviously, Q1 was $15 million lower. And then when you move that into Q2, you get the 15 plus 15, which makes it $30 million.

Okay. And I'll just leave it at that. I'll turn it over to somebody else. I'm playing catch up on the slides. Thanks.

Okay. Thanks, David.

Thank you, Mr. Gagliano. The next question is from the line of John Tumazos with John Tumazos Very Independent Research. Your line is open.

Thank you for taking my call – my question. Jesse, could you describe how the Board determines your compensation and bonus? I'm just curious about how you're incented. You're referring to the record results. I presume that's EBITDA. The stock price record was $80 in 2008, and it was $30 in 2014 earlier this year. So from a shareholders' perspective, it doesn't feel like a record moment.

Yes. I was referring to EBITDA, John. Of course, we'd like to see the stock price higher as well. My compensation is very similar to other public company compensation. You will see that there is a significant portion of that at risk and it's heavily weighted to stock price performance.

Jesse, I'm kidding you a little bit now. Chuck Mills, a famous football coach, used to say that you treated reporters like mushrooms, you kept them in the dark. It would be better if your full 10-K was disclosed before the call and we have all the hedge data and background to ask better questions and understand things better. The press release, I saw at 4:23, the slides after 5:00 o'clock, where some of those aren't enough to figure it out that as I just want to call with you?

I remember Chuck Noel, John, I also remember Chuck Knox; I grew up in that same era. But if you just turn to Page 17 of the slide, you'll see the hedge slide that we've been including for the past several quarters. No change there, quarter-over-quarter.

Thank you, Mr. Gagliano. Thank you, Mr. Tumazos. The next question is from the line of Lucas Pipes with B. Riley. Your line is open.

Thank you for taking my question. I have a brief inquiry regarding the Icelandic power market. I would like to gain a better understanding of it and how it connects to the broader European price trends. Specifically, if there were to be further escalations, such as a natural gas cutoff affecting more than just Poland and Bulgaria, how might that impact the Nord Pool? Thank you.

Sure, that's a great question, Lucas. To give you an overview, if you refer to Page 16, you can see the breakdown of our energy costs. In Iceland, 70% is linked to the LME and 30% is connected to Nord Pool, which is the market for Norway and several other Northern European countries. The physical energy contract we have with Landsvirkjun in Iceland is tied to the Nord Pool system price of power. You can check the Nord Pool to find out what that system price is. This market is primarily hydro-generated, but it does have interconnectors to Europe. Although you don't see the full effect of gas prices in Nord Pool pricing like you do in Germany or France, there are still some elevated prices because of those interconnectors to the mainland. If you look at Page 4, specifically the bottom right-hand corner, you’ll notice the orange line indicating Mainland European power prices, which are significantly elevated and generally above $250 for most of the period. In comparison, the dark blue line shows the Nord Pool forward prices, illustrating a notable disconnect from the Mainland power prices.

Sorry, we add one more thing just to understand the coal exposure. We do have 50% of our exposure hedged for the current year. So when you're looking at EBITDA. These hedges are actually financial hedges. So they'll fall below EBITDA. You'll see the full impact of Nord Pool for that 30% running through EBITDA, but then below EBITDA, when you get to cash flow. We do have a hedge in place for 60% of that exposure.

Yeah, that's a good point, Shelly, and that hedge is at €24 per megawatt, so quite a beneficial hedge. And then just as a reminder, we're 80% hedged for that link in 2023. And then starting in 2024, that linkage in Nordic power markets goes away and the Landsvirkjun contract converts to a fixed price contract.

Very helpful. Thank you both very much for this.

The next question is a follow-up from Timna Tanners with Wolfe Research. Your line is open.

I wanted to take the opportunity to discuss slide four, which shows the primary aluminum consumption days of inventory. I've noticed that inventory levels are decreasing even as aluminum prices decline, and I'm curious about any implications or insights you might have on this. Additionally, regarding the capital allocation slide where you mentioned M&A several times, could you elaborate on your thoughts about potential transactions, including the size and market areas you are considering? Thank you.

Sure, that's a good question. I'll address the first part. We continue to see significant deficits and expect this trend to persist beyond what we've indicated. The LME price is influenced by global market conditions, and inventory levels are often better represented in regional premiums. For instance, when examining the Midwest and EBPP, both currently reflect record highs, indicating the tight inventory situation in the current market. Sometimes inventory levels are more accurately captured in delivery premiums rather than the LME price, which tends to be more forward-looking. Regarding M&A, we are considering both organic growth and potential acquisitions as we identify growth opportunities. While we don't have specific targets at this time, any potential actions would likely align with markets where we have a strong presence, such as the US and Europe, and aim to address any growth gaps.

Okay. Thank you.

Great.

Thank you, Ms. Tanners. The next question is a follow-up from David Gagliano with BMO. Your line is open.

All right. Thanks for taking my follow-up. So Shelly, I know you mentioned on the call, power contract reset in the US. And I think it's $12 million a quarter higher, of which $4 million we see in the second quarter. I believe that's right. What is that reset? And are there any others coming up?

No. So David, what that means is in the U.S., specifically in MISO, you pay both an energy price and a capacity price. For the past five to seven years, the capacity price has essentially been negligible. This price is set for the entire MISO system in an auction that happens in April. This year, a substantial amount of capacity did not bid in, leading to an increase in the capacity price we are paying for energy capacity in the MISO market. This was an unexpected development within MISO, as noted in their own commentary. Additionally, we do not anticipate these levels to persist. When considering potential causes, it's likely that the market has been impacted, as many have anticipated a bit of surprise from the strength of industrial demand across the U.S., which could be a factor we observed this year, without any other similar influences on the energy price.

Okay. So that's the only reset or if I say the term incorrect, I apologize, but that's the only type of exposure to this sort of thing until next April. Is that right? Is that the idea here?

That's right.

Okay.

Correct.

Okay. In the transition to the $120 million to $130 million range, I'm curious about the power component, specifically regarding Nord Pool. Can you clarify where the impact lies in that projection for the $120 million to $130 million EBITDA guidance for the second quarter? Is it associated with that power component?

Yes.

Yes. So it's in the $45 million quarter-over-quarter increase in power cost. That is the $4 million for the capacity charge.

I see. Okay. Got it. No more. Thanks.

Thank you, Mr. Gagliano. There are no additional questions waiting at this time. I will now turn the conference over to management for any closing remarks.

Thanks, everybody for joining, and we look forward to talking to you for the Q2 call. Thanks, everybody.

That concludes the Century Aluminum Company first quarter earnings call. Thank you for your participation. You may now disconnect your lines.