Good afternoon. Thank you for attending today's Century Aluminum Company Fourth Quarter 2022 Earnings Conference Call. My name is Megan and I will be your moderator for today's call. [Operator Instructions] I will now like to pass the conference over to our host , Peter Trpkovski with Century Aluminum. Peter, please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to the conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer; Jerry Bialek, Executive Vice President and Chief Financial Officer; and Shelly Harrison, Senior Vice President of Finance and our Treasurer. After our prepared comments, we'll 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 one. 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.

Thank you, Pete, and thanks to everyone for joining. I'll start off today by quickly reviewing our 2022 performance Before discussing the improving market conditions we have seen so far in 2023. Jerry will then take you through the details of the fourth quarter and full year results. And then I'll finish with an update on Grundartangi cathouse project. Turning to slide 3, 2022 was a very volatile year in the commodity markets. Aluminum prices reached 30 year highs in the spring, driving strong financial performance across Century's businesses in Q1 and Q2. However, market conditions deteriorated over the back half of the year as high global inflation was met with rising interest rates, resulting in a significant strengthening in the U.S. dollar and pressuring aluminum prices downward. At the same time, the war on Ukraine and resulting energy crisis drove power prices to unsustainable levels across the world. All totaled Century produced adjusted EBITDA of $144 million last year. In Q4 adjusted EBITDA with a loss of $12 million, which is an improvement of approximately $24 million over Q3 as the benefits of improving energy markets and cost cutting measures across our business improved results. We finished the year with strong liquidity of $245 million. Our team completed several long term projects last year, including the restart program at Mt. Holly, which returned the smelter to 75% of capacity. We also completed the first phases of our U.S. casthouse debottlenecking. programs, which increased our capacity to produce value added products by 20,000 tonnes. To mitigate record high energy prices we made the difficult decision in June to curtail our Hawesville smelter. Since the curtailment the team of Hawesville have done a good job reducing holding costs, while maintaining the assets and a condition that would allow for restart in…

Thank you, Jesse. Let's turn to slide 6 and I'll walk you through the results for the fourth quarter. On a consolidated basis Q4 global shipments were down about 2% quarter-over-quarter, driven by the Hawesville curtailment and partially offset by the completed Mt . Holly restart project. Realized prices decreased substantially versus prior quarter, due primarily to significantly lower lagged LME prices and delivery premiums resulting in a 60% decrease in sequential net sales. Looking at Q4 operating results, adjusted EBITDA was at $12 million loss an improvement of $24 million, compared with the third quarter. Adjusted net loss was $31.3 million or $0.31 per share. In Q4 the major adjusting items were $82.9 million for the unrealized impacts of forward contracts. $5.4 million related to the excess power capacity charges associated with the Hawesville smelter, and $2.2 million per share based compensation. We had strong liquidity of $245 million at the end of the quarter, consisting of $54 million in cash and $191 million available on our credit facilities. Now turning to Slide 7 to explain the $24 million fourth quarter sequential improvement in adjusted EBITDA. Realized lagged LME prices were slightly better than anticipated in our outlet provided during the last call. Fourth quarter realized LME of $2,308 per ton was down $330 versus prior quarter while realized us Midwest premiums of $470 per tonne were down $168 and European delivery premiums of $499 per tonne were down $89. Together, these factors amounted to a $79 million headwinds in the quarter. Realized alumina cost was $397 per tonne, $99 lower on a sequential basis, contributing $36 million EBITDA. Moderating power costs added $53 million in line with expectations. Finally, volume was off a bit but our global cost savings initiatives including the Hawesville procurement action, and other headcount…

Thanks, Jerry. If you turn to slide 10, I'd like to give a quick update on our Grundartangi Casthouse project which, when finished will produce 150,000 tons of low carbon natural billet. The project will also increase our total foundry allied capacity by 60,000 tonnes to a total capacity of 120,000 tonnes. All of this production will have the capability to be cast as natural our low carbon aluminum brand, which has total scope one, two and three emissions of less than four times its Co2 per tonne of aluminum amongst the lowest carbon footprints in the world, and less than 25% of industry average. We expect to complete the casthouse by year end with its first commercial sales expected in January 2024. Our team has done an excellent job keeping this project on budget and on track through the difficult stationary environment over the past 15 months. Europe today is over 1 million tonnes short of domestic billet production, with over 300,000 tons of European billet capacity curtailed in the last two years. Given the shortage, the Grundartangi Casthouse will be well timed to supply European customers that would otherwise be left to import higher carbon billet products for the Middle East or India. We have already seen strong interest from our existing customer base to purchase billet from Grundartangi and expect to host customers in Iceland in the back half of the year to finalize sales and qualification of our products. We believe that we will have no issue placing this billet to high quality customers in the European market and that natural billet will receive an additional green premium in the marketplace. We look forward to your questions today. And we'll turn the call over now to the operator.

Thank you. [Operator Instructions] Our first question comes from the line of David Gagliano with BMO. Your line is now open.

Hello, thanks for taking my questions. I appreciate the guidance as always and I'm going to ask the usual questions about sort of annualized run rate EBITDA generation, if I do the math on Slide 9, $10 million to $15 million is the outlook for the first quarter. And then I compare the spot prices, and I use the sensitivities, I think on Slide 16, the conclusion we're coming to is, if you use spot pricing quarterly EBITDA generation goes to maybe $25 million to $30 million or $100 million to $120 million annualized, based on adjusting for spot for what's available. $100 million to $120 million annualized is that a reasonable run rate in the world that we're in now and what are aside from restarting what are some of the additional EBITDA boosters that we should expect as the year progresses?

Yes, hey, David, thanks. Thanks for the question. As we've said in the past, we're going to provide expectations for one quarter out in general for modeling purposes, we've provided you with the sensitivities as your reference. Obviously, we'll be back in just about a month, only a month now and talk about Q2. But if we continue some of the trends we've discussed already, you can start to see some improvement on a number of fronts. First, we're already starting to see our sales missing crew from the customer destocking of inventories you mentioned earlier. We expect that to ramp up and should hit our full run rate sometime in late Q2 early Q3. Second, you mentioned the pricing convention with respect to revenue as the lag spot prices, so you can use sensitivities to update that. And we've seen retail premiums come up in both the U.S. and EU. So that's yet for to the results. We also expect further cost pressure moderation. So energy prices continue to price below what we had in Q1, their signs and other raw materials, like coke should start to alleviate now as well. And then if you just look at EBITDA it obviously still reflects the market price for our remaining our full exposure. So once you factor in the 30 Euro per megawatt hour hedge, you shouldn't see further improvement to hedging from our guide as those prices continue to show contango. And then, if we start to see some China curtailments, as I discussed in my prepared remarks, you couldn't see a response in LME side, which will start to drive results. Then going forward from there, because I think you're asking a little bit broader question. Obviously, the Grundartangi Casthouse is going to have a material impact to the positive on the business. We'll think we think will be amongst the lowest cost billet producers in the world with that casthouse and when you pair it with being amongst the lowest Co2 footprint in the world as well we think that will have a very nice impact on margins at Grundartangi and we think all that billet will be in very high demand, especially in the European market. So maybe there's some thoughts you can redirect me further. But as we look forward we see a very nice future and some really nice opportunities in these two U.S. and EU markets as we move forward.

Okay, that's a helpful qualitative list and a number of those have actually been quantified in the math that I just went through. But some of them weren't. So just maybe asking again of the ones that are that you mentioned on that list that are not quantified. It seems like volume mix and other maybe that line and maybe coke and pitch, have more upside potential in the near term. Can you quantify potential order of magnitude on EBITDA uplift for those two things as we get beyond the first quarter?

We don't really want to speculate as to where pricing will go in some of those prices are going to relax, but it's been much more [indiscernible] for the past 12 months. And obviously where coke prices have been historically. And there's no real reason, no fundamental change and reason why we can't start to approach those long term historical levels. So you could start to model that in a bit, I think you can model out the run rates there. On the mix side as we said, the pricing for an annual contracts for this year on the billet side, we're not so different than last year. It's mainly been a volume destocking impact over the quarter. So if you start to look towards the volume levels we saw last year, that will give you a little bit of a sense of where the upside could be there. And then again, on the long term, we'll come back and talk more about the Grundartangi Casthouse project as we get closer to next year, in terms of its impact on the business and the profitability of the business. But as I said, I think that's the material upside for us. And one that we're really excited about.

Great. Thanks. I will turn over somebody else. Thanks.

Thank you, David. Our next question comes from the line of Lucas Pipes with B. Riley. Your line is now open.

Thank you very much, operator. Good afternoon, everyone. I think you mentioned that the potential for energy hedging in the prepared remarks and I just wanted to make sure I understand that the strategy there properly, is that related in any way to Hawesville as well? Or is it more opportunistic for locking in what you might deem to be attractive energy prices now that power prices have corrected? Thanks, thank you very much for your perspective on this.

Sure, Lucas thanks. Well, it's relevant most immediately precede because that's where our largest market exposure lies at this point. And as I mentioned we have seen those Indy hub prices come down quite significantly, and the forwards are just a little bit more stubborn as they come down. So when we look at that, you see a fairly expensive risk premium built into the [for it] right now. But we continue to believe as you look at natural gas storage in this country, natural gas production in this country, and as this has obviously come off significantly and pair that with increasing renewable generation, especially as some of these new projects start to hit and stronger coal production on the back end and utilities if you remember, this past year, we're a little bit short going into winter this year, they look much better situated and coal prices are quite high. So we continue to think that [indiscernible] collapse or that risk premium may collapse a little bit and come closer to spot, which could provide some opportunities for us. So most relevant for [indiscernible], as we look to Hawesville going forward, that is also something that we can look at there. So on the Hawesville side, as I said the market conditions are definitely better than made the decision to curtail. But we would like to see both energy and metal prices reach and then sustain levels that enable the profitable operation for the long term.

Okay, that's helpful. I appreciate that. I may come back to Hawesville later. In the presentation, you highlight opportunistic M&A and or you noted rather. And I wondered if you could maybe comment on what sort of opportunities you've been looking at, of course, I wouldn't expect you to share specifics, but it'd be helpful to get a sense for the type of transactions that could make sense. Thank you very much.

Yes. I think you're referencing the comment on the capital allocation page in the appendix. And obviously, as we look at capital allocation, and we've talked about this at some length in the past, we've got some targets that we'd like to hit before we look at how we use that cash flow going forward. I think our immediate focus is going to be as cash flow improves, as we go into this year, to put that on the balance sheet and start to improve and improve the balance sheet from here. But as the next step once we hit those targets, and as we approach those, we'll definitely come back and talk to you more. We've laid out sort of our view on how to use the capital going forward. To your specific question on M&A the past minutes [indiscernible] we are looking at opportunistic M&A we'll first look what you've seen from the past. These are usually probably going to be smaller bolt on transactions as we see assets become available that have attractive long term returns and fit within our general footprint and strategies that we've laid out. So nothing really more exciting than that. But when the opportunity is there, I think you've seen it from us in the past, we're ready to act and complete transaction, they offer those long term returns.

Okay. I appreciate that. Thank you. And I'll have to find one on Slide 20. You lay out the volumes of value add products, with the increase in ’24 is there kind of a good, good approach to quantifying how this would translate into revenue would appreciate your color on value add product titling to revenue. Thank you.

Sure. I think generally, if you look at this, obviously, the bigger gain is coming as Grundartangi Casthouse comes online. I think you can sort of count on most of that billet going into the European market. And so you can take a look at the premiums that we've seen in the European markets on billet over the past couple of years. Notably, that market has become much shorter, and about a million tonnes short today with 300,000 tons of billet capacity coming offline over the past 18 months. So since we've started that project to market opportunities for it with our customers has actually gotten more attractive. And so when looking at revenue, you can count on that additional 150,000 metric tons at Grundartangi and the other big increment being the 60,000 tonnes of additional foundry alloy capacity coming out of Grundartangi as well. So, again, you should be able to look at European market prices. Obviously, they fluctuate, I'm not going to speculate where there will be in 2024. But that should give us a good sense on the additional revenue opportunities. And from a margin perspective, I think, as I said earlier, I think you can sort of count on this asset being a brand new modern casthouse built in low cost [indiscernible] being amongst the lowest cost producers. So you can use that to think about how the margin may look.

I will sharpen my pencil on that. I appreciate the call. I'll turn it over for now and best of luck.

Thanks Lucas.

Thank you, Lucas. Our next question comes from a line of John Tumazos with Very Independent Research LLC. Your line is now open.

Thank you. Just looking at your cost of goods sold per pound shipped, excluding depreciation it calculates to a $27.6 improvement or the cost decline from the September quarter. Is there any mix effects that might have been influencing that less alloy value added product? And is it a reasonable expectation that power and other costs would improve in the March quarter maybe not $27.6 but at least half that much?

Yes, John, thanks. It's a good question. I think you're right to point to energy, the majority of that impact is going to be on the energy side. As Jerry went through we also saw much better alumina cost reading through the results. And marginally lower coke price of that mix as you mentioned. We expect to have continued improvements really not far off the magnitude that you mentioned. We should see incremental coke improvements ever probably roughly flat and then a little bit of course, we are natural gas consumers and so Henry Hub reducing --

So maybe not $0.27 but at least half that much is a good guess for the March quarter?

Yes. I think that's a good – go ahead John.

Sometimes in the investment business, we don't know whether to buy or sell. Maybe we sell half a position or a quarter of a position incrementally a little bit at a time. It would seem like with gas falling almost $2 a million it's probably pretty close to the bottom. It could go negative, like crude oil did three years ago, because there's no storage capacity, but it's a pretty decent price. Why hasn't Henry Hub power fallen below $3.5 a kilowatt hour? It had been roughly proportional to the fall in the gas price and other rises and falls fluctuations.

Yes, we agree with you, John on this. So it does appear that there's a higher risk premium embedded in the [boarding] higher prices than we've seen in years past. As you mentioned, if you just mark the gas price, and you can also look to following coal prices as well. And I mentioned references to the coal stockpiles in utilities. You can start to see that the marginal cost of energy production, in actuality has gone down quite significantly. And of course, with a product like energy which can't be stored, you see that reflected in spot prices. And so the sub $30 energy that we told you about Indy Hub for February, starts to reflect and look like those lower Henry Hub and lower thermal coal prices, as you discussed. So on balance, we think that's mostly risk premium, and probably a lot due to the volatility we've seen in the past year. But we think that probably continues to collapse as we move forward into the year. And storage continues to increase. And we start to have a little more certainty about what 2023 looks like. So I think on balanced, we're in agreement, probably with your statement.

So is this a good enough price to maybe hedge a quarter of the power you use at [indiscernible]?

Yes, as I think I mentioned in my prepared remarks, that's definitely something we're going to look at as we go into summer, and we watch these forward prices, and hopefully they start to collapse. And a little bit of that risk premium starts to exit as we move a little bit of --

Now [indiscernible] only one part of the equation. But power is pretty low. And would certainly seem like it's possible that Hawesville comes back as long as Hawesville are selling and houses are getting built.

Yes, on Hawesville like I said earlier, I think we're going to be disciplined here and make sure that we've exited what's been an extremely volatile environmental for the past 18 months. So what we'll see that energy and metal prices both reached the same levels that work, and that we can be sure that if we take the effort and costs to restart Hawesville and that we'll see the returns and it'll be profitable over the long run for us. But certainly the trends are favorable as you mentioned as energy prices have started to return towards normal. And relatively LME remains at relatively constructive levels.

So one of the earlier questions was about M&A and I always imagine like Century selling out selling the company to another entity with a stronger balance sheet whether the volatility better and be a better credit for renewable energy supplier to do a project financing off your purchase contract buying, you would buy power from them. Is that the way you think of M&A? Or is you're actually thinking about going out and buying things; your balance sheet. Your earnings have been a little volatile. So I hadn't imagined that you'd be shopping for our acquisitions?

Yes, John, I'm mostly going to punt on this question. But as you might imagine, we think there are very positive long term opportunities for Century both in our current setup, and we also think there's a number of opportunities for the business as we go forward. We've already mentioned Grundartangi Casthouse. We've got potential to restart the remaining capacity at Mt. Holly. Hopefully we see market conditions that enable the long term restart of Hawesville. So we're excited about this business and we plan to be here for a good long time.

Thank you, John. There are currently no further questions registered. [Operator Instructions]

Okay, well, we thank you everyone for the time -- sorry. Go ahead. We'll take it. Go ahead.

I apologize. Our next question is from the line of Lucas Pipes with B. Riley. Your line is open.

Thank you for taking my follow up question. I appreciate it. I know that was last minute. On the M&A side you mentioned bolt on and sometimes it's hard to and that can mean a few things. Would smelter be considered bolt on for example.

Yes, I think that's the type of transactions you've seen from us before. So actually, our entire footprint at one point or another was a bolt on smelter transaction, each and every one of the operating smelters. And then we've added value where we could so whether that be an expansion at at Grundartangi or billet casthouse at Grundartangi or billet casthouse at Seabury and Mt. Holly. That's an area we think we have some expertise in and that we can add value. So I think that's the type of transaction that I mean, in bolt on transaction if such opportunities were to come up.

I appreciate that. And then circling back on Hawesville. So you noted economics better today than they were when you made the idling decision. And you're looking for looks like a little bit more just clarity on margin? Is it clarity on margins? Or are you looking really for a wider margin and a greater margin of error to restart the facility? I'm just trying to get a better sense for what could trigger a decision to restart the facility? Thank you very much for the additional color.

Yes, sure. I think probably the key thing you're looking for there is it's really both reached levels that work from a profitability standpoint. But also we need to see some period of sustainability at those levels. So really, the energy price client here has been quite significant. It wasn't six months ago, obviously, that we thought we saw high energy prices. And while we are quite confident that when you look at energy storage levels in the U.S. that we do see market conditions that should keep energy prices lower for longer here that's something you might understand, we'd like to be prudent and make sure that those are going to confirm for some period of time here. So really, both reach those levels, and then importantly sustain those levels for a period of time that we can be confident before we make that decision.

That's helpful. Thank you. And can you remind us what would be a reasonable level of restart costs for Hawesville to kind of return to near full capacity utilization?

Yes. We'll give you some direct guidance on that when we get closer to making that decision, but what I would say is, you've recently seen as we start a number of lines of Hawesville back in 2018. And just as a reminder, in that instance, we basically had to rely on all the pots in those pot lines as we brought them back up. This time around, we would not have to do that. So it would be materially cheaper this time around than what you saw for us in 2018. But we'll give more direct guidance as we get closer to making that decision.

That's helpful. Thank you and then turning to Slide 9 in the outlook. You noticed that headwind $10 million to $5 million negative with volume mix other looking out to Q2 and the remainder of the year, order of magnitude which direction could this turn positively? What would appreciate your color on that?

Yes, sure. I think Jerry has mentioned, the majority of this is really mixed and really has to deal with that ability stopping event we spoke about earlier. And we have already started to see that improve month over month orders are up both in February and then again in March. And we would expect the same in April. There is actually a number of our customers that have a March 31 calendar year. So we're looking forward to them reentering the market in April. And so that's the one that we think could materially improve and have already started to see improve as we head into Q2 but really, it's probably going to see the most improvement as soon as you get into the middle or back half of the year.

Okay. All right. I appreciate the color and again, best of luck. Thank you.

Thank you, Lucas. There are no additional questions waiting at this time. So I'll pass the conference back over to the management team for any closing remarks.

Thank you everyone for your questions today. And we'll be talking to you again very soon.

That concludes the Century Aluminum Company fourth quarter 2022 earnings call. Thank you for your participation. I hope you have a wonderful day.