Century Aluminum Company (CENX) | The Buildout — AI Infrastructure
The Verdict
Century Aluminum smelts primary aluminum — the raw metal — at plants in Kentucky, South Carolina and Iceland, and sells standard ingot, sow, billet and foundry products. Aluminum is a second-derivative AI play: power and data-center construction uses the metal in electrical conductors and structural applications, and management names the power and data infrastructure build-out as one of four demand drivers. Century also holds a 6.8% stake in the Hawesville data center it sold in February 2026, which is leased to Anthropic. No AI-specific revenue is disclosed.
| Market Cap | — |
| Revenue (TTM) | $2.7B |
| Revenue Growth | +9.7% |
| EBITDA Margin (TTM) | 18.2% |
| Net Debt | $137M |
| Earnings Beats | 2 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Both restarts are done. Grundartangi Line 2 came back roughly six months ahead of the original October timeline, and Mt. Holly's final 90 pots restarted on time and on budget in late June 2026.
- Q2 2026 adjusted EBITDA landed inside the Q1-issued guide of $315M-$335M, up $96M sequentially.
- Net debt fell from $220M in Q1 to $98M in Q2, and management says cash exceeded total debt at the end of July. Liquidity was $785M, against a stated target of less than $300M net debt.
- Growth capex is rolling off: the Mt. Holly and Grundartangi restart investments are complete, leaving primarily sustaining capex in the second half.
- The July 20 executive order could let Century import up to 300,000 t/yr at a 25% tariff versus 50%, beginning in 2027, to help fund its share of the Oklahoma project — pending Commerce rules.
What We’re Watching
- The global deficit estimate fell from 1.4M tons on the Q1 call to around 1M tons on the Q2 call as prices returned to pre-conflict levels.
- The Q3 2026 adjusted EBITDA guide of $325M-$345M sits only slightly above Q2's actual, and the next leg depends on volume rather than price.
- Glencore is both the largest customer (54.0% of FY2025 consolidated sales) and an alumina supplier, and it held 30.0% of Century's common stock as of March 31, 2026.
- Oklahoma FID by end-2026 is gated on an unsigned power contract, an undisclosed financing package and detailed engineering by Bechtel.
The thesis looks stronger on execution and unchanged on the market. Century kept every near-term operating promise — full capacity by end-July, on-time Mt. Holly, an early Grundartangi restart — and hit its Q2 EBITDA guide, while the balance sheet moved from net debt to cash exceeding total debt. But the earnings base is still mostly a metal-price story, management's own deficit estimate came down from 1.4M to around 1M tons, and capital-return detail has now been deferred twice. The open question: does the volume-driven Q3 hold up if prices stay flat, and does Oklahoma reach FID on schedule?
Earnings
Century reported Q2 2026 net sales of $752.1M, up $103M sequentially, on shipments of roughly 131,000 tons. Gross margin expanded to 30.3% from 18.3% in Q1. Adjusted EBITDA was $326.9M, up $96M from Q1's $231.4M and inside the $315M-$335M range management had guided. Realized LME was $3.25 thousand per ton, and LME plus regional premiums added an incremental $95M versus the prior quarter.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $752M | $649M | $628M | +19.7% |
| Gross margin | 30.3% | 18.3% | 5.8% | +2450bps |
| EBITDA | $228M | $109M | $41M | +451.9% |
| EPS | $2.38 | $3.23 | $-0.05 | −4924.9% |
| Adjusted EBITDA | $326.9M | $231.4M | n/a | — |
| Aluminum shipments | 130,632 t | 122,865 t | n/a | — |
I am very proud to report today that our team has delivered on that commitment.— Jesse E. Gary, CEO, 2026-08-06
Management tone: The tone shifted from on-track planning on the May call to delivery and confidence on the August call. The prior call's central promise — all assets at full production capacity by end-July — was kept and claimed outright. Management also leaned harder into policy framing on the second call, citing Section 232, the July 20 executive order, reshoring and defense and rearmament demand.
Management Guidance
On the Q2 2026 call, management guided Q3 2026 adjusted EBITDA to $325M-$345M. The itemized drivers: lagged LME of $3.33 thousand per ton (up about $75), a U.S. Midwest premium of $1.09/lb (down 3 cents) and a European duty-paid premium of about $520/ton (up about $70). Price adds $5M-$10M; volume and sales mix adds $15M-$25M from higher Mt. Holly output and shipments; energy is a $10M-$15M headwind; other raw materials about $5M; OpEx flat. Below EBITDA, realized hedge settlements are a $20M-$25M drag and tax expense is in the same range as energy. Management reaffirmed Oklahoma FID and groundbreaking by end-2026 and first hot metal by end-2029.
Trajectory
Revenue sat in a narrow band — $628M to $649M — for four quarters through March 2026, then jumped to $752.1M in Q2 2026 as restarted capacity and higher prices both landed. Gross margin moved from 5.8% in Q2 2025 to 30.3% in Q2 2026. The move was mostly price: management said LME and regional premiums added an incremental $95M in Q2 against $8M from volume. The Q3 guide flips that mix — price contributes just $5M-$10M while volume and sales mix contributes $15M-$25M as Mt. Holly runs its first full quarter and finished goods that missed the Q2 cutoff ship.
The Model
The model projects FY+1 revenue of $3,289M and EBITDA of $1,214M, a 36.9% margin, and FY+2 revenue of $4,100M with EBITDA of $1,632M, a 39.8% margin. Near term the anchor is volume: both restarts are complete, all assets sit at full capacity for the first time in over a decade, and the Jamalco TG4 turbine came online in August. FY+2 requires the market to stay short enough to hold price while that volume ramps; Oklahoma's first hot metal, on management's own timeline, is not until the end of 2029.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $2.5B | $3.3B | $4.1B |
| YoY Growth | — | +30.1% | +24.7% |
| EBITDA | $258M | $1.2B | $1.6B |
| EBITDA Margin | 10.2% | 36.9% | 39.8% |
Projections are the median of 5 independent model runs. The model’s revenue sits 2.9% above analyst consensus.
On the Q2 2026 call, management guided Q3 2026 adjusted EBITDA to $325M-$345M. The itemized drivers: lagged LME of $3.33 thousand per ton (up about $75), a U.S. Midwest premium of $1.09/lb (down 3 cents) and a European duty-paid premium of about $520/ton (up about $70). Price adds $5M-$10M; volume and sales mix adds $15M-$25M from higher Mt. Holly output and shipments; energy is a $10M-$15M headwind; other raw materials about $5M; OpEx flat. Below EBITDA, realized hedge settlements are a $20M-$25M drag and tax expense is in the same range as energy. Management reaffirmed Oklahoma FID and groundbreaking by end-2026 and first hot metal by end-2029.
What Could Go Right — and Wrong
- Mt. Holly runs a full quarter at expanded capacity, and the finished goods that missed the Q2 shipping cutoff convert to cash in Q3.
- Grundartangi amperage normalizes after the Q4 2026 transformer install, returning Iceland volume toward its pre-failure run rate.
- The July 20 executive order clears Commerce rules and lets Century import up to 300,000 t/yr at 25% versus 50% beginning in 2027, funding its Oklahoma share.
- The Hawesville data center energizes in H2 2027, moving the 6.8% stake toward a put right that strikes at $300.0M.
- Oklahoma reaches FID with a signed power contract and a disclosed financing package, converting a 750,000 t/yr option into a costed project.
- Aluminum prices fall below pre-conflict levels, removing the price contribution that drove most of the Q1 and Q2 earnings step-up.
- Gulf smelters restart faster than expected and the global deficit estimate of around 1M tons is trimmed again from the Q1 figure of 1.4M tons.
- Mt. Holly's restart instability runs past Q3, or the Q4 Grundartangi transformer swap disrupts production, hitting the volume the Q3 guide leans on.
- Oklahoma slips past its end-2026 FID target, pushing both the 2027 start of the executive-order import benefit and first hot metal beyond the stated timeline.
- Glencore changes its offtake, alumina supply or 30.0% ownership position, affecting revenue, input supply and the shareholder register at once.
Looking Ahead
The next 12 months run through Q3 and Q4 volume. Mt. Holly's first full quarter and the shipping of Q2's finished goods land in Q3; the Grundartangi transformer swap and a return to normal amperage land in Q4; the Jamalco TG4 benefit phases in over the balance of 2026. The larger question is Oklahoma, where management has reaffirmed FID and groundbreaking by end-2026 and first hot metal by end-2029 — but three gateposts remain open: a final power contract with PSO, detailed engineering by Bechtel, and financing. A capital-return decision has been promised again with no date, and the Commerce rules that size the July 20 import benefit are still pending.
- Q3 2026Q3 2026 results — First full Mt. Holly quarter; tests the volume-led guide.
- Q3 2026Mt. Holly instability resolved — Management expects restart noise to end within the quarter.
- Q4 2026Grundartangi transformer install — Tests whether the swap avoids production interruption.
- Balance of 2026Jamalco TG4 benefit phases in — Self-generation at about $20/ton replaces grid purchases.
- End of 2026Oklahoma FID and groundbreaking — Gated on power contract, engineering and financing.
- H2 2027Hawesville data center energizes — Moves the 6.8% stake toward its $300.0M put option.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.2B | $2.5B | $2.7B | +13.9% |
| Gross Margin | 8.2% | 10.4% | 19.3% | +227bps |
| EBITDA | $203M | $258M | $487M | +26.8% |
| EBITDA Margin | 9.2% | 10.2% | 18.2% | +104bps |
| Net Income | $337M | $42M | $604M | -87.6% |
| Free Cash Flow | −$107M | $85M | $151M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)19.3%
- EBITDA Margin (TTM)18.2%
- Net Margin (TTM)22.6%
- ROIC20.4%
- FCF Conversion31.1%
- SBC / Revenue0.4%
The Company
Century Aluminum produces primary aluminum — standard-grade ingot, primary foundry alloy, billet, sow and foundry products — at smelters in the United States and Iceland. The metal feeds construction, electrical and infrastructure end-markets, and management names the power and data infrastructure build-out as one of four demand drivers alongside commercial aerospace, defense and rearmament, and reshoring. It also markets Natur-Al, a low-carbon aluminum line. Primary aluminum is a global commodity, so the company's position rests less on the product than on location and policy; management calls Century the largest producer of aluminum in the United States.
Century reports as a single segment, Primary Aluminum. It is vertically integrated at the edges rather than the middle: it holds a 55% joint-venture interest in the Jamalco bauxite mine and alumina refinery in Jamaica, and owns a carbon anode plant in the Netherlands, but makes none of its coke, pitch or cathodes internally. Smelters run at Grundartangi in Iceland, Sebree in Kentucky and Mt. Holly in South Carolina, with an Oklahoma smelter planned as a joint venture with Emirates Global Aluminium.
Business Segments
Competitive Landscape
Primary aluminum is a global commodity, and the 10-K says Century competes with aluminum producers domestically and internationally as well as with producers of alternative materials including steel, copper, carbon fiber, composites, plastic and glass. Century's own framing puts less weight on the product than on where it is made: management calls it the largest U.S. producer of primary aluminum and says the value of secure domestic units goes up in a market with no slack. The growth case rests on tariff protection and a planned Oklahoma smelter.
- Alcoa (AA)The one verified counterparty in the supply-chain read-through; reported record aluminum segment EBITDA of $1.1B at a 32.3% margin with value-added casting about 95% full, and is restarting several smelters.
- Emirates Global Aluminium (EGA)Listed as a competitor in one source and as Century's Oklahoma joint-venture partner in another; the 10-Q confirms EGA would own 60% of the planned Oklahoma smelter.
- Norsk Hydro ASANamed in filings; not discussed.
- Named in filings; not discussed.
- VedantaNamed in filings; not discussed.
Supply Chain
Century sits upstream in the aluminum chain: it buys alumina, power, coke, pitch and cathodes, then sells primary metal largely to one offtaker. No neighbor company in the supply-chain read-through mentioned Century by name.
More on CENX: Earnings recap