Century Aluminum Company Q1 2023 Earnings Call
Good afternoon. Thank you for attending today's century aluminum company first quarter 2023 earnings conference call all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.
If you'd like to queue for a question on today's call you can do so by dialing star one.
I would now like to pass the conference over to your host Peter Trochowski, Vice President Finance and Investor Relations with century aluminum you May proceed.
Thank you operator, good afternoon, everyone and welcome to the conference call.
I'm joined here today by Jesse Gary Centurys, President and Chief Executive Officer.
Jerry Biotech executive Vice President and Chief Financial Officer, and Shelly Harrison Senior Vice President of Finance and Treasurer.
After our prepared comments, we'll take your questions.
As a reminder, today's presentation is available on our website at www dot century aluminum dot 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.
Thanks, Pete and thanks to everyone for joining I'll start today by quickly reviewing our strong first quarter financial performance before turning to a brief summary of market conditions.
Jerry will then take you through the financial results and I'll finish with a discussion of our exciting new acquisition of a controlling interest in the gym, Alco alumina refinery and bauxite mines.
Turning to slide three market conditions for aluminum improved in the first quarter with both the <unk> prices and regional premiums increasing from Q4 levels driven by further supply side reductions in Europe and China.
At the same time input costs, largely decrease quarter over quarter with U S power prices falling most significantly.
These improving market conditions paired with strong operating results drove Q1, adjusted EBITDA of $24 million.
Which is an improvement of approximately $36 million over Q4.
These good results were enabled by a tremendous effort by our operators across our locations savings.
Safe and stable operations are a core requirement for success at century, and I'd like to commend all of my colleagues for their excellent operating performance they delivered in Q1.
This begins first and foremost with health and safety, which is our most important priority here at century mile.
We continue to strive towards our ultimate goal of an injury free environment I am pleased to report a continued reduction in total recordable incidents from 2021 levels. When we first implemented our new safety initiatives.
We still have room for improvement and we will remain dedicated towards reaching our ultimate goal.
Finally, I'd like to welcome all of our new colleagues from Alco to the century team.
On May 2nd we closed our acquisition of a 55% stake in the Nalco alumina refinery in bauxite mines located in Clarendon Jamaica.
Where are we now become the operating partner.
Century has long been one of the largest customers of dramatic though due to the high quality of the alumina that it produces and its strategic location in close proximity towards smelter locations in the Atlantic.
We are very pleased to add this excellent facility to the century portfolio and to reduce our short position in bauxite and alumina to more closely match our smelter capacity.
I'll return to Jim I'll call. It the end of my remarks to further discuss the strategic rationale for this transaction and what to expect from tobacco going forward.
Turning to the market environment on page four you can see the global supply and demand were roughly balanced as we entered the second quarter with additional smelter curtailments in Europe , and you know on offsetting restarts elsewhere in China.
In Europe , two additional smelters announced curtailments in Q1 due to continued high energy prices.
In total $1 2 million tons of capacity has now been curtailed in Europe since the energy crisis began representing over 50% of the total new capacity.
As you can see from the graph on the bottom right of page five EU energy prices are expected to increase further from here and we therefore see risk of an additional 250000 to 500000 tons of European curtailments over the next 12 months.
We do not anticipate any significant restarts. During this time period at forward energy prices above $150 per megawatt hour remain well above levels needed for economic restarts.
And China continued low reservoir levels and <unk> drove an additional 600000 metric tonnes of curtailments in the province in the first quarter, partially offsetting restart in Sichuan and other provinces.
In addition, increasing water shortages in Yunnan and Shanghai.
Then continuing risk of further Chinese output cuts in 2023.
Supply side headwinds continue to reduce global inventories, which are now below 50 days of global consumption.
With inventories at these historically low levels.
<unk> prices and regional premiums should respond swiftly once demand conditions improve.
In Q1 to three months of aluminum price averaged $2438 per ton up nearly a $100 from Q4 levels.
Regional delivery premiums witnessed quarter over quarter improvements as well propelled by better than anticipated demand and low inventories.
U S premiums have recently received its slightly but remained elevated well edp strengthened throughout the quarter given EU supply curtailments.
As discussed in our previous call pellet demand was muted during Q1 in the U S and Europe with the market seeing a gradual recovery in demand. After January as customers have largely concluded destocking entitled Secondary margins support the market building and construction demand was the most challenged of our markets in the first quarter likely dampened.
Rising interest rates.
Automotive and renewable energy markets on the other hand experienced the strongest demand improvement as automotive supply chain issues were alleviated and increasing and government support for renewable energy projects started to boost this sector.
This recent weakness we continue to anticipate very constructive long term bill it and still have demand growth in both the U S and Europe .
Given the global macro trends towards sustainability light weighting and electrification.
Automotive demand will benefit from all three trends as aluminum content per vehicle has steadily increased in order to meet the industry and regulators requirements for fuel efficiency lower emissions and increased production of electric vehicles for.
For example, the U S. Epa's announcement last month, proposing new emission reduction requirements that would be measured on a total fleet basis will require.
Significant EV conversion with the EPA estimates that more than two thirds of all light vehicles produced 2032 needing to be electric vehicles in order to meet the standard.
The automotive industry continues to turn towards high performance aluminum alloys, and advance extruded and rolled solutions in place of heavier traditionally steel components, driving long term billet and slab demand.
Turning to the cost side U S energy prices returned to normalized levels in Q1 with Indy hub, averaging around $33 per megawatt hour nearly 50% reduction over Q4.
U S energy supply and demand fundamentals remain constructive with natural gas reserves, hitting 35% above year ago levels and utility coal stockpiles, 28% above year ago levels.
Aluminum prices did rise during the quarter, the API, averaging $360 for the first quarter from an average of $317 in the fourth quarter.
Prices have been supported by aluminum production curtailments in Australia due to a natural gas supply shortage and bauxite mine permitting challenges.
I'll return to Illumina at the end of the call when I discuss our dream Alco acquisition. After Jerry walks you through the quarter and our Q2 outlook.
Jerry.
Thank you Jesse let's turn to slide six and I'll walk you through the results for the first quarter.
On a consolidated basis Q1 global shipments were 181000 tonnes supported by higher plant utilization levels and sell through of finished goods.
Realized metal prices improve to help deliver net sales for the quarter of $552 million, a 4% increase sequentially.
Looking at Q1 operating results adjusted EBITDA was $24 million, an improvement of $36 million sequentially.
Adjusted net loss was $11 $3 million or <unk> 11 per share.
It was an improvement of $20 million compared with prior quarter.
In Q1, and the major adjusting items were $47 8 million for the unrealized impact support contracts.
Really offset by $25 $6 million for lower of cost or net realizable value on inventory and $5 $4 million of capacity charges due to the curtailment of pause, though the latter of which will reduce to zero by the end of this month liquidity remained strong at $241 million at the end of the quarter consisting of 30 million.
And cash and $211 million available on our credit facilities, turning to slide seven to further explain the $36 million sequential improvements in adjusted EBITDA.
Realized lagged <unk> prices were slightly better than anticipated in the outlook, we provided during our last call.
First quarter realized <unk> was $2350 per ton.
$42 versus prior quarter.
While realized U S Midwest premiums of $573 per ton were up $104 <unk>.
Realized European delivery premiums of $290 per ton were down $209, reflecting a full three months lag.
Together these factors contributed to a $3 million benefit in the quarter.
Realized alumina cost was $390 per tonne $10 lower on a sequential basis.
Realized coal prices decreased 5%, while realized pitch prices increased 10% in line with expectations.
Together alumina and other raw material costs contributed $7 million to EBITDA.
Power costs nearly half from prior quarter for our MISO, Indiana hub exposure as well as at 34% reduction in Nord pool market prices, adding $35 million of incremental EBITDA slightly better than expectations.
Finally sales mix was unfavorable resulting from the customers destocking that Jesse referenced and that we had forecasted on our last call.
In total adjusted EBITDA for the first quarter was $24 million, a $36 million improvement sequentially.
Now, let's turn to slide eight for a look at cash flow.
We started the quarter was $54 million in cash and added $24 million and adjusted EBITDA.
Borrowing against our castoffs facility offset $10 million in Capex for the <unk> project.
All other capex totaled $4 million.
Hedge settlements contributed $10 million, we repaid $19 million on our revolver and other debt and the hospital curtailment power charge was $5 million working capital other used $29 million of cash during the period about $20 million of which can be explained by normal fluctuations in inventory and accounts.
Payable, leaving us with Q1, ending cash of $30 million.
Now, let's move to slide nine for insight into our expectations for the second quarter.
For Q2, the lagged <unk> of 2000 and $380 per ton is expected to be up about $30 versus Q1 realized prices.
The Q2 lagged U S. Midwest premium is forecast to be $570 per ton down slightly and the European delivery premium is expected at $305 per ton are up about $15 per ton versus the first quarter.
Lagged realized alumina is expected to be $400 per ton up slightly.
Taken together.
Lemme delivery premium pricing and alumina changes are expected to increase Q2, EBITDA by approximately $5 million versus Q1 levels.
Power prices continue to show signs of moderation and we expect a slight reduction in total energy cost to contribute approximately $5 million of improvement to EBITDA compared with Q1.
We expect the impact from Coke and pitch to be neutral to EBITDA compared with the first quarter as a reduction in coke prices is expected to be offset by stubbornly elevated pitch prices.
With respect to <unk>, we expect to breakeven or better impact to adjusted EBITDA for the second quarter.
Excited about future benefits related to increased volume and cost efficiencies and expect to Mark go to be accretive to our financial results at current spot prices beginning in the third quarter Jesse will elaborate on this in a moment.
Opex and other costs are expected to increase $5 million to $10 million due to maintenance cycles wage inflation and the addition of seasonal labor to maintain smelter stability during the summer months.
All factors considered our outlook for Q2, adjusted EBITDA is expected to be in a range of between $25 million to $30 million.
Just a few more points to make from a hedge impact standpoint, we expect a realized gain of between $5 million to $10 million in the second quarter.
We expect tax expense of approximately $5 million to $10 million.
As a reminder, both of these items fall below EBITDA and impact adjusted net income.
Finally, I'd like to point out that we do expect to fund between $10 million to $20 million in working capital at <unk>. During Q2, as we continue to ramp up production there.
That I will turn the call back over to Jesse.
Thanks, Gerry turning to slide 10, I'll walk you through the key details from our exciting to Melco acquisition, which closed last week. This.
This transaction is highly strategic for century as it secures the long term supply of high quality alumina and bauxite for smelters and achieves increased transparency in our alumina purchases.
This will create a more balanced consistent and robust operational footprint and better position us to deliver strong performance through commodity cycles.
Tobacco was originally built by Alcoa and went through a series of major investment in expansion programs in the late two thousands to bring it to its current nameplate capacity of $1 4 million tonnes.
The refinery operates as the joint venture with the remaining 45% state owned by the government of Jamaica through its holding company Clarendon alumina production limited. We are very pleased to have both as partners at Gmail Com.
We have long identified <unk> as a strategic asset for century, given the high quality of its illumina long term access to domestic bauxite and excellent workforce its strategic location in the Atlantic Basin is in close proximity to all of centuries operating the patients providing short and secure supply lines and lower logistics costs.
To each of centuries smelters.
<unk> also has existing mining and exploratory licenses to provide sufficient high quality bauxite for over 30 years of nameplate refinery production, providing a clear runway for long term operations of the refinery.
Perhaps most importantly, <unk> has a very experienced and talented workforce that shared centuries cultural focus on operating safe and sustainable facilities with first class environmental stewardship and community engagement.
The refinery has recently been through some difficult times, but it is well on its way to regaining its full potential.
In August 2021, a fire broke out in the plants powerhouse, which halted production of alumina for about a year before it resumed partial operations with only one of its two digesters. This last summer.
Given these challenges it was very important to us that we have time to conduct thorough due diligence process to ensure the full recovery of the refinery.
Due to a unique acquisition structure.
Where we provided interim funding to allow for the restart of the second digester in exchange for an option to purchase a 55% ownership interest for a dollar century teams have been able to conduct extensive due diligence and having almost continual presence onsite at chinalco since early February .
This allowed us to confirm our expectation that despite the 2021 fire to Melco retained the potential to return to a second quartile asset.
The team at <unk> has done a fantastic job restarting in the second digester with the plant now running here in annualized production rate of one 2 million tons. We expect production to continue to increase and exceed $1 2 million tons over the next several months.
The additional volume and efficiency has already significantly lowered <unk> cost structure and we expect further improvements as the volumes continue to increase.
As Jerry mentioned at current spot prices, we expect <unk> to be roughly breakeven or better in the second quarter and to be accretive to our financial results beginning in the third quarter.
Finally in order to return the asset to its full potential and one 4 million tons of capacity. We have identified a series of operational improvements and investment opportunities, which we are calling project restore which should return to melco to its historical location and the second quartile of the global cost curve and drive further improved profitability.
We expect approximately $10 million to $20 million and project restore capex over the balance of the year, which should begin driving additional cost savings and production increases as soon as Q4 of 2023.
The bulk of the remaining project Crystal our investments and volume gains will occur over 2024 to 2026.
All project restore investments are expected to have double digit unlevered IRR that meet centuries investment requirements.
We will provide you additional detail on the full scope of project restore later this year.
We are very excited to edge amount put to the century team and believe strongly that <unk> will provide century and meaningful opportunity for long term value creation for all of our stakeholders.
We look forward to your questions today, and we'll turn the call over now to the operator.
We will now begin the Q&A session, if you'd like to ask a question. Please press star followed by one on your Touchtone keypad.
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We'll pause here briefly to allow questions to generate in Q.
The first question is from the line of Lucas pipes with B Riley you May proceed.
Thank you very much operator, good afternoon, everyone and congratulations on the announcement regarding tobacco and I do have a few more questions on that and thank you for the detail already on the call, but my my first question is.
Why why now.
Is there anything that has changed in your view of the strategic landscape that makes vertical integration more attractive today than maybe in the past. Thank you very much.
Thanks Lucas Jesse.
This is something that we've been looking at and talking about for quite a while now.
And.
Being.
Backward integration up into the alumina and bauxite supply chain.
And.
And but we've been patient and waiting for the right opportunity to arise.
And into Melco, we found an asset that we knew well as I mentioned.
Long been the largest customer there.
And we're very familiar with the high quality of the alumina that they produce.
Also fits well within our footprint.
And we can take and have taken chinalco illumina to all of our operating smelters works well.
All of them.
And we also found an asset that has high potential we know it has long operated in the second quartile.
And had sort of exogenous event that created a hard times.
But given the sort of unique acquisition structure, we were able to set up here.
Really able to get our arms around the asset.
Feel very confident that we can put it back into the second quartile.
And then ultimately just derisk century from another assumption as risk of high alumina prices over the long term. So it fits with what we've always said on M&A that we'd like to find assets that fit those factors and we'll also be opportunistic and look for the right opportunity.
And for those reasons, we felt like this was the right time it without them.
Very helpful. Thank you for that.
Follow up question is on.
On some of the points you just raised.
Putting the asset back into the second quartile could you.
Comment on.
What sort of capital may still be necessary. In addition to what you outlined for the SEC.
Quarter, I think it's 20% to $30 million of working capital and then.
More broadly.
Mentioned that.
The.
Asset will be accretive to your financial metrics I think you said Q3 I wondered if you could hone in on on what the incremental improvements are that drive that accretion in Q3 versus Q2. Thank you very much.
Yeah sure. So I'll just start with the second question first and then I'll get to your Capex question.
So most of the beneficial gains will come in two factors one.
And as we continue to ramp up the volume over.
Over the back half.
<unk>.
This will occur both capital projects that will implement but also continued operational improvements that come with the restart of the second digester and the stabilization of operations at the site.
And so as we add that volume along with it will come lower costs as we spread our fixed costs over that additional volume, but also a variety of operational improvement programs, which will further push the cost down. So it's really twofold book volume and cost savings on the incremental benefits.
And on the Capex side.
We did mentioned that we expect about $10 million to $20 million over the back half of this year.
And.
Go forward there'll be a number of capital projects remaining for the 2024 to 2026 timeframe and we will come back and give you additional guidance there.
We go.
Go into the back half of the year.
Yeah.
Got it.
I appreciate that color I'll turn it over for now thank you very much.
Thanks Lucas.
Thank you. The next question is from the line of Timna Tanners with Wolfe Research you May proceed.
Hey, good afternoon.
Hey, Kevin why don't you.
Hi.
I didn't hear you mention first off.
Got it.
And our notes $28 5 million from the sale of land from that high. So did that did that is that going to appear in the second quarter or am I missing something there.
No. Thanks, Timna, yes that transaction continues to move forward.
There is a little bit of zoning.
Issues that are going on with.
With the sale of just normal process.
And so we now expect that that will close in the second half.
But should be the rest of the metrics that transaction should be the same.
Yeah.
Okay. Thanks.
Landfill closure second half and then the other question is just going back to Huntsville.
Okay.
Some of the.
And.
It was late June where you said it was closing for nine to 12 months and you have some positive commentary on the market environment and lower Kentucky energy prices. So just wanted updated thoughts on the future of Hudson.
Sure it's a great question.
As we mentioned when we curtailed we did curtail it in a very controlled manner and we continue to maintain the site.
<unk> in order to enable that restart.
That restart decision obviously is the decision that we will look to look at in the context of the totality of the circumstances. So for hospitals, specifically, we're talking about the main drivers being a prolonged period of power prices at historical levels.
And then in aluminum price that can maintain levels.
To justify the restart expenses required and the cost of <unk> and also the costs required to bring that plant back to full capacity.
So while we have seen conditions improve.
We're continuing to wait to see the volatility reduce.
And both of those components and then ultimately just finding a level that will drive those long term returns that we need to undertake to expense.
One item just to note that on the holding costs there.
Sorry, just one item to note on the holding costs there.
We do expect that the existing power capacity that was purchased last year for the facility those costs will not roll off so that's about $2 million a month for a hospital that will roll off.
Okay. So in other words, there is no specific commitment requirement to restart and you're waiting for.
Even more accommodating power prices and alumina prices does that is that what youre, saying.
That's a good summary, timna, yes, it's a holistic decision we need everything to align.
Something that we'd really like to do.
But we just need to wait for the right market conditions in order to move that forward.
Understood and then if I could just follow up and lastly on the last line of questioning around Jim Okay.
I guess the thing that makes me nervous whenever you get something for a dollar you wonder okay, what's what's along with that and so just was there any specific commitment given to the government or anything that we should be aware of in terms of the amount of capex.
Anything else that we should be thinking about in terms of cash requirements going forward and thanks again for all the detail.
No. It's a fair question Timna and just as a reminder to start we did not purchase our 55% interest from the Jamaican government, we purchase it from noble where the former owners.
And but the Jamaican government does on the other 45% of the asset.
Yes, just to your question about the $1. It was really a unique set of circumstances that enabled this to happen. So just give maybe a little bit more color.
And we've as you might imagine as a major customer that facility has been watching the the financial situations there closely.
And post fire they had a difficult period with some.
Long time frames in order to rebuild the facility and get it restarted after 2021.
And as they started to enter into once they restarted it last year in 2022. They started a single digester and as you know with these sorts of assets. It really is important to get them back to full production or to bring the cost structure down.
But they found themselves in a situation where they couldn't find the additional.
Monies that were needed to restart the second digester.
And so we worked out a situation, where we're able to provide some interim funding and.
But as you might imagine before we agreed to put the funding in we wanted to be sure that there was a return there for ourselves since we're able to negotiate this option structure, which gave US a few months to watch the second digester come up.
And make sure that we're comfortable with the rest of the due diligence around the asset.
<unk>.
And then have the right to exercise that option for a dollar.
So that's really the sort of reasoning around that dollar structure.
And some of that interim funding youll see.
That's a part of the $10 million to $20 million that Gerry mentioned that will be contributing as part of the working capital build.
It came in the form of a prepay for alumina and so some of that will then be reflection that $10 million to $20 million in working capital build going forward.
But just to your ultimate question no obligations on the Capex side.
Although we are excited about those projects, we think they are very good projects.
And no sort of liabilities assumed there is no debt at the asset or anything like that so.
It is what it looks like and we're really excited about the asset.
Thanks again.
Yes.
Thank you. The next question is from the line of John Tumazos with John Tumazos very independent research you May proceed.
Hey, John .
Sure.
Are you going to have any.
On balance sheet liabilities.
Reclamation.
Post employment costs.
Other issues.
Give us some guidance.
Yeah sure sure John .
And so all of the liabilities assumed or what I would call ordinary course liabilities for alumina refinery. So as you mentioned there are reclamation liabilities associated with the bauxite mining.
And ultimately some of the residual storage areas.
But the great part about this asset is that it does have significant mine life left so we view it as a very long term asset and has over 30 years of mine life left of high quality bauxite with their existing mining licenses. So we think this is a asset.
Asset that we will be operating especially given its place in the in the second quartile on the cost curve for a very long time.
Mike.
Consolidated liability, we see after closing.
Be more like $50 million under our $100 million.
Yes, we will give you the exact detail when we come.
To the back half of the year here. After we've worked through all the accounting.
But it's more towards the your first assumption in your latter assumption.
It's still running still running through the final accounting on that but that should give you some idea at all.
You have the right to buy.
Great.
Thank you sorry, John could you just repeat the question.
You will have the right to buy 100% of the output.
Oh.
The day Melco structure does the unincorporated joint venture where each of the.
Each of the partners takes their share of the output.
At cost and so we take our 55% of the output and cap takes their 45%.
Yeah.
Thank you.
Thanks, John .
Thank you. The next question is from the line of Cardio Yankee <unk> with BMO capital markets. You May proceed.
Hi, Thank you for taking my question just first for a.
A little bit of a quarry.
Vacation you said, the 10% to 20 million in working capital that's considered what was pre funding.
For the second day gesture.
Yeah, a portion of that was a part.
Part of our prepayment for alumina, which will now be delivered.
In the second quarter and will be part of that $10 million to $20 million in working capital build.
And how much was the total funding can you provide that number.
We're not disclosing that but it is within the $10 million to $20 million and the rest of that $10 million to $20 million is rep.
Represents a buildup in inventory.
Payables and receivables as the production has increased at the facility.
Okay then.
On slide 17, you typically provide sensitivity and it's clear that it doesn't include Jim I'll call, but can you provide any direction as to how the contracts how the sensitivities, especially for alumina aren't going to change going forward.
Yeah.
Sure Katja.
<unk>.
For Q2, and given there's sort of an existing cargo mix in sales coming out of Jim Alco, our internal mix will stay roughly the same as what you see on page 17.
As we integrate and take our share of the <unk> production going forward, what you'll see is our mix will change towards roughly half <unk> linked in half two at Gmail close production cost.
And that sort of our 55% share of Jim Balco is about 650000 tons of alumina.
Which is roughly half of our requirements and.
So that gives you a sense and we will give you some additional detail there going forward, but hopefully that roughly balanced half felony percentage after melco production cost will be pretty close.
And you can provide information about the production cost is right now.
No we don't break down production cost by an asset by individual asset level.
But we will look we will provide some sort of additional input.
On the Q3 call as to what how GNL closed integrated into the system.
Just given that the transaction closed last week.
Need a little more time to give the specifics there.
Okay. Thank you very much.
Thanks, Scott Yeah.
Thank you. The next question is a follow up from Lucas with B Riley you May proceed.
Thank you very much.
A few quick follow ups first one is on slide nine.
Opex other head of 10% to $5 million in Q2.
Can you can you remind us what what that headwind is and is it a one off or would repeat.
I stay in the stay in this segment through the end of the year. Thank you.
Hey, Lucas Jerry.
As I said in my prepared remarks that the $5 million to $10 million is made up of.
No.
Maintenance cycles, we had some wage inflation there and we've also had some seasonal labor.
If you think back to the fourth quarter of last year, we did a fair amount of.
Cost cutting and we've had some efficiencies that flowed through the fourth quarter or into the first quarter. We're now approaching a cycle, where we're going to invest a little bit.
Of additional Opex just to help us through the summer months and.
Manage the seasonality that a difficult timeframe during stability is an important aspect.
That timeframe and so we will put a little bit of seasonal labor in there as well.
Yeah.
Got it so so we shouldnt expect a reversal in Q3, but maybe in Q4.
Correct.
That's helpful. Thank you and then.
Back to Timna asked questions on cost well a two part question.
The first is.
What is your sense for restart costs for hospital.
How how much capital could be required and then second part.
You would you hedge possible output.
With with <unk>.
Yes.
Nice mechanisms as you did in the past I think the market was somewhat skeptical of that approach, but would appreciate your thoughts on that matter today. Thank you.
Thanks Lucas.
Yeah, well, obviously once we make the decision to restart.
We will give additional detail probably in both of those questions at that time.
No.
Obviously, both of those are specific to the exact operating environment that you find yourself and when you make that restart decision, but maybe you can give you a little bit of context, when we last we started.
The Huntsville back in 2018 Youll.
You'll remember it was about $25 million per pot lines that we brought back on.
That lets you remember that time those lines had been down and required fully re lines of the cells, which is much more capital intensive and then the manner in which it would be restarted this time because all of those cells were recently realigned from from the more recent restart.
When we restart the next time around we will have significantly less <unk> cost and so I would expect those restart costs to be <unk>.
Inefficiently lower than that $25 million for Bottomline.
But we will give you additional detail once we actually make the decision.
Thank you.
Again, if you'd like to ask a question. Please dial star one.
There are no further questions waiting in queue I'd like to turn the call back over to Jesse Gary for concluding remarks.
Thanks, everybody for dialing into the call this quarter and we look forward to talking to you on the third quarter call. Thanks.
This concludes today's conference call. Thank you all for your participation you may now disconnect your lines.