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Century Aluminum (CENX) & Qair Agree Over Wind Power Supply

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Century Aluminum Company’s (CENX - Free Report) fully-owned subsidiary, Nordural Grundartangi ehf, and Qair, an independent renewable power producer, recently signed a letter of intent to supply the Grundartangi’s smelter with green electricity that originates from two of Qair’s wind farms. The farms have a total installed capacity of 200 MW that is undergoing development in Iceland.

The two companies have also agreed to jointly work for the development of a solution to capture carbon dioxide from the Grundartangi smelter. If the solution is successful, the trapped gas would be used for the production of eFuel for Qair’s hydrogen plant, which is planned next to Grundartangi’s site.

Qair plans to develop, build, own, and operate two wind farms that have a total installed capacity of 200 MW and supply electricity to Grundartangi through a power purchase agreement.

Century Aluminum’s commitment to environmental sustainability is reflected in its efforts to reduce the carbon footprint of its aluminum products, and is further strengthened by the collaboration with Qair.

Century Aluminum’s shares have risen 64.4% over the past year, outperforming the 21.3% rise of the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

In the third quarter of 2021, Century Aluminum incurred an adjusted loss of 6 cents per share, narrower than the Zacks Consensus Estimate of a loss of 10 cents. The company’s revenues were $581.4 million in the quarter, which jumped 48% year over year but missed the Zacks Consensus Estimate of $602.9 million.

CENX, in its third-quarter earnings call, stated that it is on track with the expansion projects at Mt. Holly and Hawesville, and expects both projects to be completed by the year-end, which will provide the much-needed additional units to the marketplace as well as additional LME and regional premium pricing exposure. Also, it has started the construction of a 150,000-ton low-carbon billet cast-house at Grundartangi. The completion of the two-year project promises to cast more than 80% of Grundartangi’s production as value-added products, further strengthening the world-class asset. The billets and other value-added products at Grundartangi will continue to be produced using 100% renewable energy, thereby expanding the company’s Natur-Al line of low-carbon products and bringing low-carbon billets to the European marketplace.

It also noted that global energy shortages and China’s de-carbonization policies have led to production cuts in China and Europe, leading the global aluminum market into deficit and taking down aluminum inventories to multi-year lows.

Zacks Rank & Stocks to Consider

Currently, Century Aluminum carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the industrial products space include A.O. Smith Corporation (AOS - Free Report) , Alcoa Corporation (AA - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and AZZ Incorporated (AZZ - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

A.O. Smith has an expected earnings growth rate of 35.2% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised 6% upward over the last 60 days.

A.O. Smith beat the Zacks Consensus Estimate for earnings in all the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 17%, on average. Its shares have also gained around 45% over a year.

Alcoa has an expected earnings growth rate of 676% for the current year. The Zacks Consensus Estimate for the current year has been revised around 31.5% upward over the last 60 days.

Alcoa beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters. The company delivered a trailing four-quarter earnings surprise of roughly 40%, on average. Its shares have also rallied around 177% over a year.

AZZ has an expected earnings growth rate of 47% for the current fiscal year. The Zacks Consensus Estimate for the current year has been revised roughly 2% upward over the last 60 days.

AZZ beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 25.5%, on average. Its shares have also rallied around 36.4% over a year.


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