Century Aluminum Co. (NASDAQ:CENX) Q1 2018 Earnings Conference Call - Final Transcript
May 03, 2018 • 05:00 pm ET
Ladies and gentlemen, thank you for standing by. Welcome to the Century Aluminum Company First Quarter 2018 Earnings Conference. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded.
I'd now like to turn the conference over to our host, Finance Manager for Century Aluminum, Mr. Peter Trpkovski. Please go ahead, sir.
Thank you very much, operator. Good afternoon, everyone, and welcome to the conference call. I'm joined here today by Mike Bless, Century's President and Chief Executive 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.
If you take a slide -- look at Slide 2, 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.
With that, I'll hand the call to Mike.
Michael A. Bless
Thanks very much, Pete. And thanks to all of you for joining us this afternoon as always, if we could turn to Slide 4 please. I'll give a quick rundown on the last couple months, they've obviously been busy ones. And most importantly, as I'll note in a couple of moments, we had a very good quarter in the operations. Safety performance was acceptable and we had a generally stable process and good efficiencies across the department at each of the plants.
Financial results for the quarter came in just as we had expected. As we had forecast, realized higher metal prices were significantly more than offset by raw material price increases. Carbon costs were up as expected and the same is true for the higher alumina costs and material purchased back when the market was high, as you will recall in the late months of 2017. This will actually go the other way in the second quarter results as the normalized prices that we saw at the beginning of the year go through our P&L. Of course, the markets moved meaningfully since then and I'll comment on that in just a couple minutes. Against that higher alumina price, we captured only a portion of the higher metal price in the first quarter and that's of course, due to the fact that
Most of our sales contracts -- in fact virtually all of our sales contacts are priced on a two-month lag.
We will see close to that full amount in the second quarter and Shelly in just a couple minutes will provide you all the detail on the various price movements both from Q4 to Q1 that we just -- that we're reporting today. And then she will also give you some estimates on those same movements from Q1 to Q2. The alumina price