PR Newswire
STAMFORD, Conn., Apr. 28, 2021
STAMFORD, Conn., Apr. 28, 2021 /PRNewswire/ --
First Quarter 2021 Financial Highlights:
Strong Financial Position and Cash Flow:
Second Quarter Outlook:
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Note: For the Company's guidance with respect to second quarter 2021 Adjusted EBITDA, we are not able to provide without unreasonable effort the most directly comparable GAAP financial measure, or reconciliation to such GAAP financial measure, because certain items that impact such measures are uncertain, out of the Company's control or cannot be reasonably predicted.
Tronox Holdings plc (NYSE:TROX) ("Tronox" or the "Company"), the world's leading integrated manufacturer of titanium dioxide pigment, today reported its financial results for the quarter ending March 31, 2021, as follows:
Summary of Financial Results for the Quarter Ending March 31, 2021
| | | | | |
(Millions of dollars) | Q1 2021 | Q1 2020 | Y-o-Y % ∆ | Q4 2020 | Q-o-Q % ∆ |
Revenue | $891 | $722 | 23 % | $783 | 14 % |
TiO2 | 696 | 580 | 20 % | 587 | 19 % |
Zircon | 123 | 65 | 89 % | 94 | 31 % |
Feedstock and other products | 72 | 77 | (6)% | 102 | (29)% |
Net Income (Loss) from Continuing Ops | 26 | 40 | (35)% | 57 | n/m |
Adjusted EBITDA | 225 | 174 | 29 % | 204 | 10 % |
Adjusted EBITDA Margin % | 25 % | 24 % | 1 pt | 26 % | (1) pt |
| | | | | |
| Y-o-Y % ∆ | | Q-o-Q % ∆ | ||
| Volume | Price | | Volume | Price |
TiO2 | 16 % | 4 % | | 15 % | 3 % |
Local Currency Basis | n/a | 1 % | | n/a | 3 % |
Zircon | 91 % | (2)% | | 30 % | - % |
| | | | | |
Tronox's first quarter results saw a continuation of the market recovery which began late in the third quarter of 2020. This resulted in a record quarter for TiO2 and zircon sales volumes. First quarter revenue increased 14 percent sequentially, driven primarily by double-digit growth in both TiO2 and zircon volumes and higher TiO2 average selling prices. TiO2 sales volume grew 15 percent quarter over quarter led by growth in Europe and Asia Pacific. South America and Asia Pacific growth led volume growth year over year. North America also grew sequentially and year over year, but at comparatively lower growth levels given the overall resiliency of the region throughout 2020. Increases in TiO2 selling prices in all regions resulted in a 3 percent sequential improvement globally. Revenue from zircon sales increased 31 percent sequentially, as global economic recovery took hold and China architectural completions rose. This resulted in a 30 percent increase in sequential zircon sales volumes, while pricing remained level. Revenue from feedstock and other products declined 29 percent sequentially, primarily due to the conclusion in the fourth quarter of 2020 of the mandated chloride slag sales per the FTC consent order, allowing Tronox to utilize more of its feedstock produced internally. Tronox delivered Adjusted EBITDA of $225 million, another record achievement for the Company. Adjusted EBITDA margin was 25 percent.
Commenting on these results, John D. Romano, co-chief executive officer, stated, "Our first quarter performance outpaced our expectations, driven by exceptional demand across all regions and end markets, resulting in a record quarter across a number of metrics. Achieving our highest TiO2 sales volume quarter in our Company's history is an incredible accomplishment and is evidence of continuation of the recovery of the TiO2 cycle. Zircon sales volumes also broke Company records and outpaced our expectations driven by global economic recovery and robust demand in China that Tronox was prepared to meet with both production and inventory on hand. We were able to partially offset top-line headwinds from the loss of external chloride slag sales, which had been mandated by the FTC consent order, through increased pig iron revenues due largely to rising prices. Our performance this quarter would not have been possible without the dedication of the Tronox team, and in particular, our global supply chain and order-to-delivery employees who navigated numerous challenges and disruptions to meet our commitments and serve our customers, so thank you to our employees around the world."
Jean-François Turgeon, co-chief executive officer, added, "Anticipated first quarter foreign exchange rate and pigment cost headwinds outlined during our fourth quarter earnings call were offset by favorable pricing and volumes leading to an Adjusted EBITDA of $225 million, well above our previously forecasted range. The organization has remained focused on safely operating the business to produce the feedstock used internally to produce safe, quality, low-cost, sustainable tons for our customers.
"With an expectation that the global recovery will continue into the second quarter and given the lower than typical inventory levels throughout the supply chain, we anticipate TiO2 sales volumes will increase in the low- to mid-single digit percent range over our record-breaking first quarter levels, setting us up for another strong volume quarter. Zircon sales volumes are expected to remain elevated above 2019 and 2020 quarterly volume levels, though off from the first quarter peak. TiO2 and zircon prices are expected to increase as we make progress with our regional price initiatives. These tailwinds on the commercial side are expected be partially offset by sequential headwinds from unfavorable foreign exchange rates, inflation, and a planned maintenance shutdown of our Australian Northern Operations synthetic rutile production facility. As a result, we anticipate Q2 2021 Adjusted EBITDA of $225-$240 million."
Mr. Romano further added, "As a result of our refinancing transactions in the first quarter, we extended our debt portfolio's weighted average maturity by approximately three years. Given our strong free cash flow in the quarter, we will have repaid an additional $100 million of debt by the end of this month, on top of the $300 million we committed to repay during the first quarter. We preserved sufficient prepayable debt and remain committed to using incremental free cash flow to reduce our gross debt balance to achieve our target of $2.5 billion, a goal which we believe we can reach ahead of our previously stated target of 2023."
Mr. Turgeon concluded, "This is an exciting time in our Company, and we remain confident that with our portfolio of assets and market position, we are prepared to continue capitalizing on the momentum and delivering on our commitments to our stakeholders. We have continued to operate with an eye on the future and are diligently progressing on our previously identified key capital projects to reduce costs and ensure we sustain our advantaged position."
Financial Summary for the Quarter Ending March 31, 2021
Tronox reported revenue of $891 million for the first quarter 2021, an increase of 23 percent compared to first quarter 2020 revenues of $722 million. Income from operations of $125 million compared to $79 million in the year-ago quarter. Net income attributable to Tronox was $19 million, or $0.12 per diluted share, compared to a net income attributable to Tronox of $32 million, or $0.22 per diluted share, in the year-ago quarter. Net income attributable to Tronox in the first quarter 2021 included transaction costs, debt paydown costs, and other adjustments that totaled $47 million or $0.31 per diluted share. Excluding these items, adjusted net income attributable to Tronox (Non-GAAP) was $66 million, or $0.43 per diluted share. Adjusted EBITDA of $225 million increased 29 percent compared to $174 million in the prior-year quarter.
First Quarter 2021 vs. First Quarter 2020
First Quarter 2021 vs. Fourth Quarter 2020
Other Financial Information
Webcast Conference Call
Tronox will conduct a webcast conference call on Thursday, April 29, 2021, at 8:00 a.m. ET (New York). The live call is open to the public via internet broadcast and telephone.
Internet Broadcast: http://investor.tronox.com
Dial-in Telephone Numbers:
United States: +1.866.270.1533
International: +1.412.317.0797
Conference Call Presentation Slides will be used during the conference call and will be available on our website: http://investor.tronox.com
Conference Call Replay: Available via the internet and telephone beginning on April 29, 2021, 11:00 a.m. ET (New York), until May 4, 2021, 5:00 p.m. ET (New York)
Internet Replay: http://investor.tronox.com
Replay Dial-in Telephone Numbers:
United States: +1.877.344.7529
International: +1.412.317.0088
Replay Access Code: 10154942
Upcoming Conferences
During the second quarter 2021, a member of management is scheduled to present at the following conferences:
Accompanying conference and meeting materials will be available at http://investor.tronox.com
About Tronox
Tronox Holdings plc is one of the world's leading producers of high-quality titanium products, including titanium dioxide pigment, specialty-grade titanium dioxide products and high-purity titanium chemicals; and zircon. We mine titanium-bearing mineral sands and operate upgrading facilities that produce high-grade titanium feedstock materials, pig iron and other minerals. With approximately 6,500 employees across six continents, our rich diversity, unmatched vertical integration model, and unparalleled operational and technical expertise across the value chain, position Tronox as the preeminent titanium dioxide producer in the world. For more information about how our products add brightness and durability to paints, plastics, paper and other everyday products, visit tronox.com.
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