TROX - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to Tronox Limited First Quarter 2018 Earnings Conference Call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session, and instructions will be given at that time [Operator Instructions]. And as a reminder, this conference is being recorded. I'd now like to turn the conference over to Brennen Arndt, Senior Vice President, Investor Relations. Sir?

Brennen Arndt

Financial through and as using John already welcome, our On Tronox Jeff through our call. and Executive website and XXXX First Chief Quinn, James, move listening you them. We'll Officer; Those Chief be Call. Commercial Conference call should Chief Officer; Operating of Carlson, by Officer. Officer; today's Tim you, everyone, Limited's slides we to Internet have Quarter President Jean-François Thank broadcast Turgeon, Chief Romano, today are

the For year our if report not so, XXXX. those December under site haven't Factors specific including you those including, entitled and that in the heading, annual include This in you on represents our can A looking to best Web forward will factors our for subject tronox.com. filings, ended uncertainties by summarized but the our XX-K certain judgment various listening SEC telephone, are rather, based and Risk our already today's statements XX, discussion today information. access done them information Form at that limited reminder on on risks to,

revise undertakes However, vary uncertainties. forward-looking company these update based no any or obligation risks actual The statements. to and on may results

slide share. EBITDA, the we adjusted the deck. the release and to free in terms their that cash our the provided earnings certain and During we Reconciliations call, both will EBITDA, terms non-U.S. are flow conference earnings appendix use These nearest business. management to refer GAAP in diluted per include in financial U.S. of GAAP adjusted of our

to pleasure It's Jeff to Moving Quinn. turn the now X. call my to over Jeff? Slide

Jeff Quinn

it weeks making general of towards to morning JF over you. quarter. Cristal then morning start going the closing I'll over on again things, and about status the to good several the John we turn the a comments significant made progress talk first about strong this few team. acquisition. I'm Up Tim our and few Brennen, a last and will to of all and with Thanks, remarks by the

basis. our First, conditional follow-on meetings, finalizing is State are result Commission, a European the questions to proposed all schedule, current from issues negotiating we're through remedy. dependent in potential a the remedy remedy now objection. obtaining many formally the process, the of and Play the to with remaining at XX, as the with We're Under will on only we've discussions a commission an also agreement on discussions Those the received EU. narrowed and and clearance regarding hearing that proposed formal realtime the agree May the which aiming address multiple of ongoing overall with by submitted. execution to remedy on the upon details about commissioned the counterparties we of time, be timing Understandably, the staff the a

full our is to copy July commission market Monday, we're on start a successful, the to provide the remedy, motion in additional seeking filed the the on resolution a until judge a typical remedy proceedings in posted on timely FTC. the matter, X had out, U.S. of replace the the only court new is any those If court Chairperson, to ago, our commissioner the U.S. something week. through who scheduled we Senate May weeks. the with U.S., the on full Senate motion The allow ask able publicly If the consider commissioners, the to of resolution. new administrative XXth. available, confirmed result the X administrative by remedy as case X In commissioners FTC and slate Prior the the direct the will not more XX. the fifth for Under Assuming process pending. while in the to staff a a awaiting their by FTC's to progress to to stay will information the would their is we the approved in pursuing number stay federal FTC the Two full website. service commissioners the the direct if the the is granted, be result confidential, X staff FTC which deadline outgoing last weeks would federal we've alternative the a would with on is the of FTC EU commissioners. full not The then the approval to of and with test confirmation presented checks of then we operating commission approval. been a began process, discussions will for claims. is permitted new rules, of likely commission much be confirmations, its discussions the don't remedy FTC submittal commissioners is Since remedy

term, by these We, and related forward customer base enhance of assets. a of global resolution risk-adjusted to outside assumption better the does on cycle of plants those to global including price like company meet the long producers. moving Chinese premier with the producer in share assets, more perplexed get done. to ownership the significant allows are competitiveness market creating to business acquisition deal look positioned your the the are the to for our in the Cristal U.S., fully that real appear is reflect a impatience We We these competitive Clearly, owning assets a synergies competitors, some pigment and across not industry. Owning that strong stronger, we from more share our demands enhance will than the this the integration our less to vertical and deal this TiOX you, reaching of the for getting global globally. perhaps our are strategy derived a there done. to us operation of be U.S. value the U.S. the to and While

belief deal will many reiterate, the our have me get as firm that the done. stated Let we past, is times in

Our as believe do quickly progress reasonably been address proportionate concerns, an are goal. has I making reach always goal appropriate as regulatory and to towards so possible. valid resolution to and any this to we

continue to on our we one hit at planning to securing running the integration that we also the work ground work regulatory the we closing continue While following ensure day hard approvals, acquisition. of

the AMIC, level Metals As between we part of night, known of to cycle Saudi will the of our close and entry entity planning, slagger Arabia. feedstock slag the vertical term and agreement Jazan a Cluster otherwise smelter announced operations, services us optimize last the by with and to regard that an long pigment Cristal Jazan, the TASNEE Company, integration the Industries over Agreement located and as technical enable owned Option with further an into titanium the The facility merger. across in following Cristal the Advanced

under and support combined metric agreement We of capacity this will will commissioning metric source to iron, slag to the ensure to work titanium technical to has smelter XX AMIC combine pig world-class for plants and tonnes XXX,XXX of XXX,XXX in services become our up of pigment the together the facility. operations company. that of the tonnes low-cost expertise of the with feedstock a slagger successful slagger The

the of company with lend completed, production exercise the quarterly agree AMIC over by the we million up debt. XX% that acquire We AMIC. in intend sustained basis adjustment feedstock the on and provided AMIC or our agreed the Arabia. through effective in Agreement, ownership with consideration capital the and Option Cristal currently funds $XXX for and budget will the SPV, plan. $XXX consist as will a along merger to contribute its to Saudi debt the support of will AMIC purpose Tronox facilitate to and million be the by assumption the of meets total they These AMIC drawn may to create incorporated working the ownership startup hold. needed is $XXX the of payable based a interests and of criteria the an ownership cash certain upon part When to operational SPV for a option slagger a a capital of and interest period, SPV that debt expenditures As integrated SPV special to vehicle, million loan, The long-term expenses down the upon slagger.

Tronox Tronox to their briefly like and shares. shareholder agreement shareholders to relating agreed rights an as AMIC topic have is of a intent next or to obligations our and the on respective a I'd enter reaffirmation The mention monetize In Exxaro of into of remaining the addition, portion update all the SPV. and to

a remaining voting commencement ago, decision XX.X to been You'll the shareholder only the potential company the of XX% offering, announcing of first timing currently recall monetize future sold their an actual to to A of time. This couple XX. at balance the of The reducing the concludes to general made May on a necessary Tronox shareholder any process. to to their last Exxaro registered meeting approvals of XX%. occur to underwritten October Exxaro with No by their sell by holdings in started million the shares Exxaro voting has is that ownership from process obtain as the scheduled that shares up weeks step in offering.

with our colleagues on We to dialogue Exxaro continue issues. from those

results. Moving to quarter our first

clearly integration of top performance quarter strategy. and vertical line benefits bottom strong the our the Our in reflected

of XX% and margin of flow free EBITDA EBITDA delivered Our $XX growth million. growth cash XX% business TiOX of revenue XX%, adjusted and of adjusted

operations co-products from performed all value and and benefit favorable very feedstock well chain. to conditions pigment, market Our the across continue

of and conditions. Our reflection track. of not market feedstock softening despite reality This and large were shipments skewed just of comparisons line of co-products effects bottom many the you delivered that opposite. that results the is some for of of the the the quarter-versus-quarter strong top timing The is a

zircon and to and the co-products continue iron and across favorable trends such strengthening in markets, seeing are year. We as pig expect these feedstock

commercial results to one-half The Jean-François political dollar been South the the African quarter. rand call of these in quarter of over shipment South operations. stabilizing a headwind FX thus quarter our the strengthening the of that U.S. with the first as first by related the review impacted future the rapid the were Despite of dollar relationship the of the turn bode first during now exchange from in rand I'll of and impact, has appears the business a be primarily quarter timing quarter, appreciated the of approximately by triggered against short-term to performance the more to to thorough first recent XX% changes changes in quarter. the strong and second transient well relative the in to The Our including operational headwinds, foreign issue. Africa. the quarter also rand-dollar recovered fourth the for South XXXX, political now far of to African TiOX John impacts and XXXX discussion

John? will be Officer. John our First Romano, Chief Commercial

John Romano

Jeff. Thanks,

XX% lower local titanium X% look of Titanium a $XX quarter. sales by in volumes the driven $XX sales driven zircon to co-products first XX% maintenance. quarter. regions. first primarily availability for feedstock reflecting There and lower, prices product in as timing $XX XX% million $XX zircon year-ago first and revenue conditions sales were of more prices while basis, increased with TiOX start of year-ago I'll the million iron. pig feedstock sales pigment, the were increased in Favorable market XX%, shipments first selling sales Feedstock Pigment higher lower sales due sales increased volumes, X. volumes prices as average currency million XX% and XX%, X% selling quarter. and iron sales year-ago XX%. increased titanium for XX% to Pig $XXX XX% were selling of the continue Pigment the and on prices originally driven higher shipments from sales at all inventory plant growth a by in revenue in chloride-process sales Slide $XX selling shipments. of quarter timing increased XX%, slag Zircon increased quarter selling scheduled timing of related of of than as XX%. to titanium were to were which prices, and by increased the Moving the no million the Sales offset million million XX% of segment other the XX% occurred sales the the co-product chloride-process higher increased slag. quarter. of prior in as $XXX or to increased quarter of lower, compared in prices compared million volumes

iron quarter. was sales and X, quarter. Slide decline feedstock chloride-process lower X% shipments and timing to pig last comparison that a high zircon, successful quarter generated despite shipments occurred to selling all pigment and year's approximately expected of approximately shipments. prices million due we and earlier versus for that making revenue the and to largely fourth by fourth about million were several higher of spoke X again, in co-products. of volume level segment for across of revenue revenue that the of Moving million In feedstock our than was associated co-products product call, sequential for TiOX We titanium driven lines major X in in The EBITDA. lower slag, XX

originally second into now the scheduled shipments quarter have moved some addition, In the for quarter. fourth

Jeff As given of the seeing the market. sequentially pricing higher prices is in this we're and an the softening across of in market all impact conditions selling realized said timing any shipments momentums previously, way of tight conditions, lines. not supply-demand indicator product We

will shipments much is to business primarily in Richards and bulk a different South and business, than influenced the Africa. congestion, can be bit port Bay in port by larger feedstock make that Our our continue that TiOX in routinely we in of co-products

higher this selling business feedstock compared again, shipment of Pigment X% volumes expect Zircon increased in slag reflecting strengthen XXX the quarter, were we XX%, increased inventory as the to quarter, in Again or of double-digit of iron co-products quarter demand increased shipment titanium have XX sales X% by million X% to of as the decreased XX There and CP pig shipment pigment slag on XXX local by part to in sales increased lower sequential million at sales, XX timing. sales of and volumes. XX volume, to titanium and of continue million driven to have iron XX% were pig shipments. co-products co-products currency lower and resulting second as million and opportunities X%, sales slag and prior we to opportunities offset quarter, the prior sales prices of will In have as the completed more the growth markets than quarter. offset of sequential X%. We which feedstock were prices XX% quarter. expecting were XX% healthy pig this million planned sales time. continue chloride-process driven XX%, and volumes the XX% basis, were from support sales zircon, selling second lower, lower and we feedstocks as Though in growth shipments from timing those sales million in XX sell of due in million sales in timing. X% zircon iron the by shipment prices we're me, Pigment timing the or products of of timing. and excuse a Feedstock no lower lower due chloride-process other by to were sales, strengthen

the working across a year, across extends we with of continuing. see of these customers that, market JF I you, cycle. that JF? stabilize in next can the intent to the a we beyond flow performance, view As to our cash to of And the that and the favorable call profitability, with I'll we And couple quarters, for turn thank the are we our metrics. conditions and business volatility with look the over our review reinvest so margins proactively operating continue with

Jean-François Turgeon

and John. I'll for operating feedstock to that mentioning by demand serve pigment, capacity plant mine Thanks, full start our are co-product. and at strong

tonnes the take all that opportunity record plants work low-cost customer. our our In happen. and on safe, want for production this well of our their employee good I producing are to achieved March. fact, for to performing focus plant our All in pigment thanks quality, made

our guiding global business. Our all TiOX across principle

foreign and pigment in principally all across line as year-ago from was to co-product. million unfavorable partially exchange $XXX $XX adjusted rand offset line major million for higher price quarter. performance product on quarter, in higher first as performance and strong top cost, South African year-ago selling in first by EBITDA segment driven the feedstock modestly largely TiOX XX% costs. Let's quarter EBITDA look increased compared the This the well of the our operating at by

the $XXX the million than the quarter. in EBITDA sequential adjusted fourth versus quarter XX% comparison million to fourth lower of Moving was $XXX

selling impact in gain timing pigment of feedstock the rand, the again, to and foreign and on extent, than from benefit Aussie As higher lesser price more both John relative those principally quarter. costs, headwind shipment offsetting and exchange the and co-product reported, price But fourth a the to we the were dollar.

stabilizing, very Change South the Jeff been quarter. those As this lower benefit XX% operational the bode in the against the Africa. rand integration reflection our asset team them recent in the pressure. in dollar way, with FX our of XX% African much impact to drive of South clear quarter. I second work mentioned, full far high-margin the from fourth and And same exchange adjusted of the so offset the In margin is first program vertical XXXX continue co-product, appear half we XXXX, Much foreign appreciate Since My my driven XXXX, for the was operation. -- has in EBITDA change view, quarter by in our of shipment of U.S. the approximately the of and a rand-dollar excellence well quarter to relationship headwind the that on to inflationary then, to successful and headwind operation. be same and to recovered all the 'XX our overcame despite is as XXXX. our political

improve more of than per product. We that have million cost to cost our of reduction of the project a $XX pipeline continue tonne will

is acquisition well our advanced. integration work addition, planning In

we affecting as the condition Cristal program comment will to of drought that the the This as the Tronox on deliver are We soon A us Western allow are asset. combined busy and close the quickly excellence the operational smelter. transaction. through managed across planning mine for our around we deployment local synergy have the authority has We operation. the to Though Africa, receive strong operation. been condition the we support including community impact our severe, them from our of Cape Namakwa the South without significant and the benefit Sand and from on

were In XXXX. operation, that to flow. This be strong should TiOX addition, to of plant we contingency to further continue free continue the of provided include for $XX financial million is We I'll quarter, Carlson Tim to implemented I plan first allowing of without that, scheduled as cash $XX With interruption. the produce $XX to impact expenditure and a desalination flow August million cash the turn a free activity review purchase in million. over generate call capital deliver while us you, cash operational by in thank operating our minimize and position. the was that on our

Tim Carlson

Thank you, JF.

the Moving XX, acquisition XXXX, billion, equivalents costs issuance to comprised cash transaction. for debt restricted billion, million cash cash and of $X.XX was March of Liquidity Cristal was the net debt was Slide X. $XXX and of consolidated of and for billion, $X.XX agreements. cash of $X.XX million credit revolving billion under $X.XX available cash the net gross and $XXX Cristal restricted On debt, including equivalents cash including

the X.X% X.XX% at XXXX an on net million notes used We notes, set of principal in placement of total million. XXXX. cost the blended of first to aggregate senior amount X.X% of senior fixed principal that fund for aggregate offering $XXX due a XX, indebtedness in of of were due $XXX was redemption proceeds the in and April our debt XX% was March completed XXXX, X, we Our private quarter rate. a On

approximately of XXXX corporate cash which bond in the last net be income, $XX included payment in million. to million, from Cash quarter, the $XXX for semi-annual first call. expect forecasted full used $XX $XXX in down was we of quarter's year million interest operations We interest the a million that expense, interest

is now year, capital and these the million with in $XXX XXXX of over We're of I of a semi-annual million. now on second result in interest fourth bond approximately $XX and of spending these the closing each capital in expenditures tax call depreciation, tax Each quarter. depletion first was of turn that, refinancing, to cash I'll expense our million, stand-alone the $XXX Tronox the thank spending, reaffirming a $XXX payments Capital you, basis. made With to will rather DD&A third estimates $XX million, As million for quarters expectations were amortization $XX for and to and quarter cash than Jeff comments. and our million. be and $XXX million DD&A Jeff? debt

Jeff Quinn

turning from points on like some And perspectives Thanks, now, the XXXX this Slide like take Yes. key and share Tim. away to you I'd summarize to X, we'd morning's call. to

acquisition. First, significant we've weeks last the several Cristal progress made over towards the closing

As transaction. obtaining the an a We're the all meetings, follow-on through dependent the with process multiple issues execution European narrowed contemplated formal to of objection. Play and the a agreement by the their regarding proposed the result on conditional only address schedule, our EU commissioned XX details submit we've hearing then to remedy agree staff clearance we're remedy. counterparties the the is State remaining also the and potential finalizing the discussions Under from on negotiating remedy aiming and of Commission the of with May current upon now regarding remedial the with formally

Assuming more resolution. the those resolution, commissioners a FTC if much consider we're while rules, and commission approved is us the we proceeding the court to remedy out, typical stay provide filed would able the to to case seek ask administrative the is administrative is the something until presented allow full week confidential, of granted, then our submission would is remedy in direct stay full is not In process, the its scheduled the engage the in we by on result in we FTC with which a XX. staff don't pending. would the discussions the begin not this progress the the If a timely deadline successful, Under to any be FTC's test then with the approval. in the EU new full permitted, Since be will alternative process the If remedy May staff on will that's the checks federal to XX. approval through for the to for motion discussions a pursuing remedy, to to market the commission remedy commissioners, of the likely the the U.S., commission. July the result information by additional

are focused the most as and shareholders our We possible value our customers. creating for on

always proportionate any reasonably possible. and Our and goal to as appropriate so regulatory resolution reach been has concerns, as an to do to quickly

I regard. progress As have in believe earlier, we this made said I

Second, we're strong that across pigment continuing XXXX the by We year for confident the another aggregate, levels inventories business business. balance across balances driven the will supply-demand be normal performance We momentum our of of in globally the see industry. remain our that of or year, in tight across TiOX company. our entire value at below chain believe the

We also Chinese rates, globally at believe pigment producers including utilization to run the producers. continue higher

take Our global our and mission is servicing to strong continue business, customer own of operating base. to performance challenge our our care our and

customers stabilizing slag allow them the and and co-products, our in conditions better our to a valleys, see we're intent ago, John that said, to with of will value intent that business from which stabilize As we volatility across proactively tightening plan cycle. and the customers with can business. the removing But them the pig for to value reinvest the minutes prices, in their to create cycle feedstock with our providing few working the so continued iron. continue margins the by zircon the We of additional which -- across

third, producer, expect XXXX year will benefit both be from of to As levels. a fully rising And feedstock transformation. to margins pigment integrated a continue we and at

work is Our acquisition advanced. very integration planning

following on synergies. the the to one, to close of was estimate our $X to to the of deliver enable In pro ground us Cristal acquisition last forma well. Both without on running million the expect call, hit billion, perform quarter's $XXX EBITDA synergies. the continue XXXX day Tronox and to quickly We

of $X.X benefit again, upward our EBITDA billion we're quarter the Cristal, synergies. between revising $X.X those of for before to billion, be our XXXX pro results and With first and forma estimates

expect one of We $XXX synergies year million.

unlocking product global the strong consistently, since increasing assets synergistic the day our cost heard investment lowering incremental worldwide our markets As this combination we about base. our you volumes flow to utilization, customer asset is to flow. will announced position, cycle strong serve serve That all across in have and pro-competitive highly facilitate transaction, generating the us cash cash growing better

remains investors, and and goal With premier our company the is Our like customers for I our our world's now create to employees. for I call unchanged, that for that, thank for the TiOX questions. to open you,

Operator

John Instructions] comes with McNulty Capital Markets. [Operator Our from BMO question first

is line now open. Your

John McNulty

I slagger, Couple, guess, I points. potential how about when tied the your should fuller thinking bring the kind to when we the about around to platform? you're can guess, I that that optionality guess, of thinking synergy be you

Jeff Quinn

well continue that demand us volumes Well, our the as significant most the important mineral the capacity. there full is slagger thing sands will allow be obviously, will It operate a to to of mineral producing sands at as operations JF... high-value for source significant of feedstocks. And

Jean-François Turgeon

Yes.

and upgrade iron the plant we as we a use the pig that business. obtain we as well pigment into is slag when the generates think ilmenite revenue co-product, our waste of that high-grade the feedstock, for I less source generate,

John McNulty

a quantify bit guess, of in a benefit what would I the on can us just little you current environment, this normalized But give basis say, or to color? be,

Jeff Quinn

It's if supplier will in low-cost in at well of run capacity we full smelter feedstock John. Jazan, say script, press from iron a in would both the our nameplate the that advantage and get competitive as or the I it about a significantly that standpoint. But to release No, be to the feedstock regard. a talked that as utilization, we pig near can world-class operations,

attractive of a the it's us. plus pig for economically So very iron, sales merchant that, move

John McNulty

would it helpful. be of opportunities much guess, I remedy, then be from what EC some in impact And terms minimal, guess, the but I relatively would of color into that, can I the on I but you that think guess, the your details, in if can would on you know transaction? too you give us like terms sounds you get can't quantify synergy It be

Jeff Quinn

Yes. on remedy be I at if would impact believe any minimal, all. very the any for synergies the

John McNulty

on are and into from lot ore and than integrated then guess, gives about guess, think you up catching relative to terms even to XX the and thinking you I that gotten of next about got should We've tightening maybe I the X we last things the question. on XX the up how that do that? And peers months? kind see you ores one the I be platforms how of just it guess, a fully up. how pigments And side XXXX that over feedback benefit pigment as being to think I of the tightening do look balance ores, you your in overall? mean, maybe pigments and side XXXX, more the tightening how about you've like

John Romano

Romano. Yes. John This is

on the of the as co-products we're feedstock and I for seeing support script, and currently we inventory demand opportunities. more to than in have So mentioned, feedstock co-products, those kind

going to strong to continue in demand growth I that we're area. would say, see, So

the good rutile moving natural that product to of For thing a us, the that's our because up, continuing and prices feedstock, that more of high-grade we're have plants. own to we're internalize seeing feed we

price. to steady and We continue pricing, provide into to in all we're TiOX far I would don't QX QX, we're on regions. the continuing see going a goes, forward but As moderate demand moving appreciation as on typically to market see look say,

Operator

Wells Our with Fargo. next Mitsch question Frank comes from

Frank Mitsch

how I a get with to up long don't have transaction. particularly timing. as great sense on Jeff, FTC your takes to question speed, have a it I to commissioners

the the if to line that point that to it's typical think that said look So at What process? you have the satisfactory, not them ask federal to dialogue, process. get direct you point, to court going you and go to for where you'll might to like federal would time I then into wondering, court get was into you're in because ask engage you

Jeff Quinn

don't through the as stay, not trial cetera. a process the until final, would or with decision time time but result et route, to federal in grant a resolution, was and to were the go in you hearing we decision, point has in May to year. filed. frame the FTC from able around -- administrative to know, our X the that to If typical XX. the not a X provide the period would were FTC trial federal the probably, begin months that Frank, think process that after is not of the allowed is FTC If to somewhere a court a later cetera, I scheduled hearing Well, it et And persuade would to and take ALJ continue not transaction. much court discussions relevant the render were forward the That on our that

Frank Mitsch

event a discussions that it we a July is May a months' if that that be federal point and stand thinking I of get here the okay frame? so about, frame resolution, are two FTC, court go say, sort month where that would event, let's something you is guess you process, time or get we should you follow-up. a to to on with XX, a is, don't time of I So June the or your the I is mean, that guess, type

Jeff Quinn

of that Well, certified I the on for time FTC by act think, issue no line to there motion sort once motion to a stay, is specific or commissioners the the ALJ. is that our for

approval conditional FTC if not the Union the I we early restraining time well it continue receive there frame that hope for July in to the assuming to and to would believe court the in that to will, If of federal and as think, is able go we obtain a EU early the close PI. there. try because things the be at final venue we decision deadline it certainly, a to July, point did relevant the order temporary will the transaction move European

time So once is that with we that be to resolved, to EU in discussions time situation we the the so frame, able that would FTC engage frame, we're well July our good would that meaningful be advance go. of early relevant. hope It in is very believe

Frank Mitsch

I right. All mean, a helpful. just And That's housekeeping question.

that discussed South a the negative XX% You had impact dollar that QX. in relative appreciated African so to rand the

rand impact Although based half now, going that to the was your QX that in results? is was realized trends where to the negative be of of of What magnitude impact, are QX. on negative roughly order

Tim Carlson

on $XX The translation million and to $X rand itself million $XX in another QX on on receivables. about was million costs

Frank Mitsch

So to together negative $XX million close impact? all

Tim Carlson

million as Sequential QX $X rates. to dollar in also in Correct. well. million favor has the back of QX $X in should to QX. our We changed see And QX in come Aussie $XX Aussie back well. About we the as that quarter. dollar from given million should see half And the current come

Operator

comes with question next Global. Our Ahmed Hassan Alembic from

Hassan Ahmed

mean, that A Are this of fact of brush, the walking question disposal? Are sort about too be remedy, we a sort was from and providing get much talking are technology regards in talking I disclose the of with sense cognizant we away -- trying sort to some customers, obviously, terms clients? should asset it? discussions of of I sort stroke, mean, certain you can't European to broad we of Commission how to the thinking talking competitors? we I But like. just broad

Jeff Quinn

is important the something It's not on the in to designed we the it The balance. to believe identified will have that a markets value from not be scope is relevant synergies remedy and something the been would as creation would have that on have significant the impact so a opportunities. our maintain it's The believes competitive transaction. commission of being realize impact ability the problematic significant that

I'm say number and it's because conclude and ahead confidentiality requirements. very next of just to get that commission that that, very days. Beyond But out more can the of at don't to with in pleased obviously the all optimistic we because we're reluctant something the want I of

Hassan Ahmed

things. pricing Now on the moving pigment to side, of the specifically, side

it that had look take weakness. there. some their citing, the back be it pricing epoxies, volume they're you there's significant earnings. price of because were them volume most their They increasing But of over obviously, reported the be I weather weakness. a it materials, issues coatings inflation raw offset as companies the about year sort be raw of are Some basically in these They at basket material propylene, of talking of TiOX, of half to But been talking mean, about, hikes.

camp TiOX the requesting, the the week, what pricing in you So in trying where you past sense like? with about companies amenable I'm of obviously, are are balances of is to and keeping at a it levels the it significantly guys Are get guys was below having? longer-term you that of talking you supply-demand pricing giving relatively to where sort now, contracts? just right the that sort of mind coatings are sort How snug the in discussions

John Romano

John Yes. Romano. is This

and to various that's believe regards a healthy some we're We our So number for also trying concluded. with pricing of market, we've the already longer-term out of with for customers, the volatility in our as take that's of healthy did levels to towards something which customers. as of I, it's business, Jeff referenced discussion

I there's So would that's not North that in that really region making And in. of where levels not that we're I we're we're varying we're focused and just and the just depending at that's, progress globally. coatings, would say, say, in America, upon looking working

Hassan Ahmed

one final may. I quick one, And if

Exxaro the mentioned the the just any me, you sale, stake remind before are there You closes? Exxaro stake if sale restrictions deal could -- closes Cristal deal before on

Jeff Quinn

clarity I the mean, but window to have think, obviously, during time of on there's No. everything at per I no in not a or a would se, period deal. Exxaro sell when

considering certainly clarity practical their matter, we Exxaro the think would that deal don't is I don't forward. per timing. move obviously, just a economic are But, totally there as no, expect and there on decision that's wait se. So until before to would restrictions I that control

Operator

comes from question Duffy Barclays. with Fischer next Our

Michael Leithead

Duffy It's this actually on Leithead Mike morning. for

slides. capacity talked plants I think your you about the TiOX running full in at

X, dependent there plant debottlenecking grow over, assets? base demand? Or the your years, capability existing plant don't Cristal the have say, next the So if expected market's X on we fulfill to at is if to are you incremental the Cristal

Jean-François Turgeon

is can our it's JF. Look, that plant. there we Mike, in some do always debottlenecking

is But program asset at part of there's, we to to in grow Cristal see of huge obviously, that the our customer a capability the grow a by our excellence upside the That's facility, the with allow increase achieving hidden operational tight asset. able liberating it. being could on control has uptime by we probably market supply the us Cristal the those and synergy to Our of of and slow place. improving factory how

Jeff Quinn

Mike, even able consider to the us allow of flow the And to just way. also the combined not wherewithal but adding the financial Tronox capacity it's to the cash and Cristal will note, ways projects on look costs the with legacy assets, will at company and lowering that Yes. have, and current that debottlenecking for be operations

really to benefit to competitive reduce is, net-net in we and our our customers. So the increase very believe, of it ability cost exponential a become more

Michael Leithead

clarifying And question. just a

in to from are that are or forward be those expected that mention 'XX? shipments now back Are are QX. shipments I 'XX think I expected land heard you XQ some that shipments were pushed to XQ from XQ in pulled

Jeff Quinn

No.

misspoke. John actually think I

actually being it's from Q. think were second pushed first I shipments that Q to

prepared John remarks. the during maybe think I misspoke

Tim Carlson

had We in supposed went it that was as in a shipment to slag QX. QX, mentioned go John CP

Michael Leithead

but some XQ. to was that No, so in from up was pulled Is that just going fair? occurred are forward in shipments was some maybe clear, to be show XQ, there also XQ that so into there XQ that have should

Jeff Quinn

a little bit things suffering were bit We makes pre-shipments some some So and directions, from delayed. Exactly. quarter little both volumes we right? look first the had artificially it a weak when on

So...

John Romano

QX. a chloride now that of slag one shipment was has specifically, those And in shipped

Operator

Research. Matthew comes Our with DeYoe from Vertical next question

Your now line is open.

Matthew DeYoe

at now and where we FTC of know So paths parallel about or all embarked FTC or kind you Or know the packages start in stand formally? have of FTC. on the talked you discussions indications have kind with acquirers for stand with the once interest? you all of But discussions potential that on past I you engagement, does remedy come with more U.S. where

Jeff Quinn

we've have in parallel advance both we path as there we paths Yes, parallel regard. that to a on said, process, are embarked and continued

as started speak. processes we and continue So are those

Matthew DeYoe

you they side appreciate? to rutile the bit sands things. more slag both in year-over-year And much kind talk and if trends ilmenite in of how continued might Okay. prices, and then have on Can about I mineral of little dig a sequentially

John Romano

of feedstock rutile on and natural internalizing all up. as iron. can't we're seeing stage, selling not zircon, historically lot price We because those, get as how what but we're we're seeing specific this pig we much, in move well too as particular we we're high-grade would prices much move about as But are selling, have a of that. at Again,

Matthew DeYoe

more of things. mean, from that? mentioned around color starting side quality higher I provide to the of the internalization a you of little benefit you're Can increasingly the you integration. quantification on the vertical bit Then

Jean-François Turgeon

when really case, of Well, the and of our you is the in price. deploy continue see we're value the on we maybe program, side the feedstock. integration moving actually of that excellence in that our Because both we that lowering making cost absorb the point the on to and sand operational feedstock business the it's can margin the say shows vertical TiOX the side pigment. we mineral And up

no really So Tronox its price feedstock see integrated, mean, of moving fully see that's really the as up. I competitor where differentiator we is the the because versus impact that's being and you strength

Tim Carlson

the is the And obviously, add segment competitive advantage I year in last delivered and numbers, so. absence EBITDA or give quarter, for some this the in zircon I you think margin. the can't the a per that, we of iron that EBITDA that, But despite even other segments advantage margin a reflected shipments, pig would improvement us. over the and mean, high-margin of XX% se. It's adjusted I

at I as full fixed that that's mineral sands pigment absorbing high well reflection well. very assets of as utilization cost the pretty So assets think clear the running a

Operator

question from Roberts John comes with UBS. next Our

John Roberts

give and think sequentially of basically large any up regions that customer and pricing would from regions, pricing X%? currency and Or could TiOX versus types? was specialty quarter be all X% small up And for basic. customers you maybe said first sense deviations sequentially you versus mix fourth local quarter. Was I us that versus in a a average of

John Romano

We saw we with so during announced one of didn't the had exception of QX. the process implement a in that XQ too, there. were it that price we QX. We increase price across in part Yes. all the flat. in through had implementing increase Latin price America, was We was no of But appreciation latter going deterioration regions

to continuing price it's again, but see appreciation. growth, So moderate we're

Operator

from Barclays. with comes Lalli next Brian question Our

Brian Lalli

bit out, a to proceeds. I from standpoint you you would regulatory on sort I maybe but first handle about And there just to you deal secondly, of scenarios. anticipated how sheet guess, balance come things the how walk some that? if remedies the I balance or guess, have do potential you'd are that Anything or obviously, I standpoint. but just deal, sale sheet, an from I first, last from this then would I a the Could could do close the you lot cash. from be repayments in the you that the color. have you of Tim. guess, close, were spoke just asset recap resizing months and you on That again, still guess, the would of But under, a guess, X through the I call. if know all figuring balance of loans this away a repayment color. be sheet? through few know you're that helpful helpful would walk

Tim Carlson

believe Thanks, from as paid the would as off. have Alkali Brian, that million $XXX be blocked borrower would would the paid to term and for from close, be the accounts not we well questions. If will, liquidated obviously, the loan off be but we we proceeds did

two our debt would good those with payments, So quite still. be ratio

also opportunities bolt As sand of at other it it be China allocation impact remedies we've in the and debt, now, maybe or some standpoint. potentially as for as We there to but relates from options. would repurchase number a be, repay share would on and mineral relates potential looked capital would what any to different something to dividend, of some a

Brian Lalli

a that to cycle? reasonable a can think three get ultimately you know is a talked through about back as something I just, guess, a on I times, you basis, sheet Just quick on that. growth again, more follow-up balance about you confirm, kind I to of two

Tim Carlson

Yes, that close internal in as still is of actually one another that growth approach, a target. our cash target result and our very I being to a see management

Brian Lalli

previously. us And your if I missed missed just, was this it, before? could And a what apologize. then sure wasn't and again, was my apologize you maybe I guidance I but your guess, last what give one. But number I I've for Again I I've guess, sense

inclusive $X synergies. billion, think I number seen I that that I'd some thought was of a was

about how So understand of to you again make I sure sort just guys it... have thought

Jeff Quinn

taking that billion consistent we've in synergies expecting $X And of $XXX million synergies. without billion guidance we're was to $X.X on been million year synergies, now to previous X. $X and without the Yes, billion $XXX

Tim Carlson

this talked then million million. associated total million about as the only about, it from the change $XXX period. $XXX slagger an And But year. free we've that million Brian, $XX to that. cash still over XX-month $XXX There's coming with relates to

Operator

from Our Cobalt Cooperman Capital. next question comes Wayne with

Wayne Cooperman

increase to, anything through So you before. walk just you the the was Can in side, particular this good from to presynergies? the guidance? ask the Tronox in to it guidance Cristal point coming Is side, increase going I could from timing. us question

Jeff Quinn

it's benefiting from standpoint, performing from tight sides. market an are the both and Yes, safety operational it's Both Wayne, conditions. coming from well from companies a standpoint

want from basis company comes terms think company look we, both. that a developing billion obviously what pro the forma conservative insight we to we $X is provide situation a we actually to No, pro would is statement of conservative continue to what it So forma exactly like. on see look like. the would of billion the and in And $X.X that,

Wayne Cooperman

And to your this remedies are whatever includes expected point? get approved that the at deal

Jeff Quinn

does. it Yes,

Operator

from James comes with question next Our Rossport. Hayter

line open. Your is

James Hayter

operation, want may. on the just to I Two if I questions. feedstock focus

titanium ilmenite, Or sold? sale? I been turned been particularly has worked into that in the has inventory slag Firstly, into of has titanium correctly for had, saying it that in through you And through. worked hear did and been you slags turned excess all as

Jean-François Turgeon

talked obviously still with did I in in maybe Look, Jazan sitting South we sitting Africa. here. ilmenite has that know we there And have not one Well, still have and Tom use that the we But ground. we the huge the express see the that the on I our on smelter, excess South to JF clearly. that past, is it's synergy operation. about of the African in of that pile James, ground ilmenite is ilmenite the myself

the So it synergy pleased will morning Option announcement the that this of why will that's out of because very I this were facilitate deal. we mean, with Agreement the deliver

Jeff Quinn

stock at That X Yes. that's haul there is value. carried

it's very we're able obviously, to So actually profitable that. when process

James Hayter

I guys. that I'm great, asked. pleased That's

of feedstock TiOX, there what and feedstock I is why between can't the earlier But you percentage the competitive are question The second give in I number. know a regards is externally us the operations percentage can produce split at an exact internally? to reasons consumed types. sold numbers? around use sort if question what XXX and around if look I relates numbers they a year to I produce work to But are that get different those they're rough out just brush with? towards that XXX. can internally, or am I does number sort way a can know I of XXX me broad of And you

Jeff Quinn

majority we Typically, open on much slag. don't, what disclose fact market. The of selling sell we're is again, do exactly in CP how the we that

rutile. generically, I to -- give also sell just natural some number. it's the I'm But exact guess, reluctant We

John Romano

Yes. merchant under are the of longer-term a No, disclosed we've the CP side that contract. slag sales

market in playing not we're So per merchant the se.

say for feedstock presume the and I'm given market fair tight increasingly in to can, think ounce we're conditions every in-house, down it's I -- also it's yes, rutile also going it into think to the fair selling downstream pigment the and resultant that demand I need I you using sorry, also the to that to is natural make rather markets. our was than

Tim Carlson

will that feedstock And close as be are transaction, the externally we internalized. we the selling

Operator

questions further queue. [Operator show in I Instructions] no

Quinn So for I'd to like turn to it over remarks. back Mr. closing

Jeff Quinn

you Thank for producers. for global the look time. with additional sharing to this come support making for James. interest TiOX of forward continued towards and weeks you your Tronox. being with the progress and of, each about thank want in, Thank in you, you for morning your the creating us to Again, updates We I we're world's leading

very So a good thank Have much. you day.

Operator

Thank participation. Thank very conclude gentlemen, that your today's for Ladies conference. does and you. you much

Have You may all day. wonderful disconnect. a

Tronox (TROX) 14 May 182018 Q1 Earnings call transcript