| Century Aluminum’s Working Capital Could Come Down In 2015 | |
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Key Takeaways From Century Aluminum's 4Q Earnings (Part 13 of 16) (Continued from Part 12) Century Aluminum’s working capital
Previously, we saw that Century Aluminum’s (CENX) days payable outstanding, or DPO, increased in 4Q14. This reduced its working capital requirements. However, its working capital might come down more in 1Q15. This would positively impact Century Aluminum’s cash flows this year.
Inventory
Century Aluminum’s inventories increased in 4Q14. This can be seen in the above chart. Century Aluminum expects its inventories to come down in 1Q15. This would increase its cash flows. Earlier, Century Aluminum highlighted that its inventory might increase after the Mt. Holly acquisition. Its new sales mechanism was also expected to increase its inventory levels.
Alcoa (AA) had a negative impact of $12 million. This was due to remeasuring the Firth Rixson inventories. Alcoa had to measure down some of Firth Rixson’s inventory in accordance with purchase accounting standards. Currently, Alcoa forms 3.30% of the Materials Select Sector SPDR ETF (XLB). Allegheny Technologies Inc. (ATI) forms 0.55% of XLB.
The SPDR S&P Metals and Mining ETF (XME) could be an alternative play on the diversified metals and mining industry.
Pension expense
As part of the Mt. Holly acquisition deal, both parties agreed to fully fund its pension plan. Alcoa already made its part of the contribution. Century Aluminum is expected to make a contribution of $35–$40 million towards the pension plan in the first half of 2015. This will have a negative impact on Century Aluminum’s cash flows. However, Century Aluminum has a comfortable liquidity position to take care of this expense.
In fact, it increased its share buyback program this year. We’ll discuss this in more detail in the next part of this series.
Continue to Part 14 Browse this series on Market Realist:
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Century Aluminum est une société de production minière basée aux Etats-Unis D'Amerique. Century Aluminum est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 1,5 milliards US$ (1,4 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2009 à 1,06 US$, et son plus haut niveau récent le 16 mai 2024 à 17,40 US$. Century Aluminum possède 87 260 000 actions en circulation. |