TROX - Earnings call transcript Q1 2022

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Operator

Hello, everyone and welcome to Tronox Holdings First Quarter 2022 Earnings Call. My name is Juan and I will be coordinating your call today. At this time, all participants are in listen-only mode. [Operator Instructions] I would now like to turn the call over to Jennifer Guenther, Vice President of Investor Relations. Please Jennifer, go ahead.

Jennifer Guenther

to quarter welcome and conference and webcast. you, our XXXX first call Thank

X. today Carlson, our and to On Turning slide call Co-Chief Officers; Officer. Jean-François Executive are and Financial Tim Chief Turgeon, Romano John

will of listening should Those already using today's our them. broadcast you as move by we We through be call. have through Internet website slides

website those access the can listening so done you by For on telephone at our already if you haven't investor.tronox.com. presentation

call that on Moving include information factors and but information to specific forward-looking summarized the this our X. various made slide including judgment and certain website and limited we to risks This are the represents best reminder in our comments in what today. presentation friendly that our and know our provided subject to filings. based not uncertainties on A on statements SEC

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

conference we the our certain During presentation. and useful the refer evaluating in financial to US our Reconciliations their and GAAP investors provided in the the believe in nearest management use terms are terms business are to in release to of of GAAP non-US performance. the company's earnings call appendix we will that accompanying

made note a comparisons please otherwise Additionally, that are all during on noted. call the financial year-over-year basis unless

pleasure the call turn Romano. now over to Moving my to is X. slide John John? It to

John Romano

facilities TiOX continents. quick for of producer and integrated six plants, you the everyone good joining today. world's a Jennifer Thanks by five mines morning and pigment the nine largest Tronox. this overview thank setting upgrading six I'll us and across stage with with We're vertically start morning

distributed Americas, which and XXXX was Middle billion, Pacific. Asia fairly $X.X East Our across totaled the evenly Africa and Europe, revenue

our supports approximately Our customers space capacity of million tons of XXXX globally. pigment well-balanced X.X

XX% Our secure and needs internal our supply this customers. for vertically supplies business feedstock our model ensures integrated of approximately and consistent

world's the of with value we generate zircon of TiOX, also to second addition approximately largest XXX,XXX significant as In capacity. tons producer

transformative of value and Cristal the proud our are the the want years quarter created address will the three crisis the following stakeholders. generate But have Ukraine. in to acquisition We continue I to to highlights, for ago the and organization turning before first we've we

less Our is Russia XXXX. affected. support our to X% are the of financial exposure hearts more minimal go and offer with we revenue impacted conflict out than those importantly combined who from to total our But in and Ukraine by those our

continued global rate run is This project million line in the solid customers our backdrop $XXX prices, these to costs, to operating basis our our we team results In quarter invested which delivered guided generate we slide ton capital and our serve facility, challenging so the in $XXX the UK of of range. the to expected projects. commitment. XXXX. let's $XXX extended first at Tronox Now key digitally Despite results X on by included to pigment $XXX transform of their dedication against review we've end our constraints newTRON, the adjusted is and to EBITDA delivered ongoing resolved. continued challenges higher a turn quarter expectations, with we savings to million It for thank that environment overcoming within while which quarter, per to portfolio, Tronox to our a our logistics downtime deliver a commodity of since been first results. Stallingborough employees increasing of our testament has

closed previously the generated extending more on in strengthened from in approved remaining XXXX the in business differentiated our our our we achievement pre-payable our flow mining interest in Africa XXXX. $XX we mine have transaction, call. detail in these free South and through Eastern goal our And million Campaspe under and $XXX also invested while refinancing the $XX totaling debt. will enabling We in model. $X.X share the increasing gross extensions review Atlas also in Australia and million reducing the payments, JF of We and February quarter and investments cash of of later the April million Xth, repurchase of billion maturities stock shares million ahead target We debt stated program repurchased X.X Board cash

Finally, of In one by smelters Investor achieve project which be XXXX we expected to report our our producer provide project midyear, to Celsius worldwide SOLA into of megawatts power XXth. now Tronox's More Africa. agreement provide energy purchase announced and pursuing expand are This in we below align that our our Group Africa, example we the needs South lower we a to South X. should sustainability review announced Scope and scenario will initiatives published and on which fully quarter significant entered be a emissions about approximately further March be at independent South X implemented of Day the on to project and publicly goal fourth project we solar to emissions our numerous to gas X anticipate XXXX. degrees mines information available greenhouse only net-zero electricity renewable long-term two approximately XX% will on This with of expected on by announced XXXX. power we is warming with investments meet African South by our and global We in by the XX%. XXX will power is sustainability African June initiatives slide

Revenue includes in versus first representing driven by an prior X% year, $XX interest. quarter the revenue. Income slide increase from review highlights more to pig higher and represented the iron TiOX related and Turning X. operations fee fee the settlement I briefly million totaling will detail. break negotiated of $XXX onetime our million, financial

effective XX.X%. our rate rate in XX%, tax these quarter QX tax foreign Our have to Without due settlement normalized and been in rate tax was jurisdictions. the effective the changes would tax items,

adjusted Our year-over-year. diluted increase. GAAP and XX% $X.XX, an diluted was per was share X% of $X.XX represented million $XXX EBITDA increase of earnings earnings per Adjusted our share a

constraints, product related Free the increased to million $XX XX.X%, flow mix zircon, Our in margin costs cash of Stallingborough. by downtime basis impacted decreased logistics higher extended XX%. XX points commodity unfavorable and to

slide more moving review Now X, in I to detail. performance commercial will our

currency sales, the increase year partially volumes. XX%, a selling versus XX% TiOX a currency on average by US with TiOX continued were prices headwinds. quarter local a of partially our the with team basis on increased prices basis. our number results first decrease in in revenue of supply prior Total $XXX increase or of and X% by local manage chain cost previously while Our by was in an zircon basis, both XX% an a X% from TiOX volumes offset revenue driven pig million, Sequentially, line expectation navigating a communicated increased range, lower by and regions, driven the including dollar inflation at high US increased average demand, disruptions. continuing our selling customer macro across dollar offset X% currency iron Revenue increase to and on driven challenges by higher end volumes while strong and input all sales

to quarters remain tight situation, sequential volumes decreased pig Although by are balance chain solid. zircon times products both in demand prices. due in average and Sequentially, prices average supply inventories continue $XX selling we Revenue low higher a TiOX as supply/demand by average be million, higher and basis a remains decrease increased demand and and a iron inventory year-over-year we the $XXX while by prices. previous while was other volume due disruptions. due partially to decline volumes, a continue Zircon volumes to XX% a delivery XX% shipping XX% sales primarily XX%, from higher to remains revenue on extended million, declined selling driven representing macro volumes previously. continued XX%. XX% increase increase, strong monitor offset from the delays communicated The to in to selling TiOX

dedicated Our are be customers. supplier choice of for we the working team our to of to the right earn ensure employees

increased the our of beyond We number contracts securing well global our long-term XXXX. have volume volumes customer substantially base, with

TiOX iron tightness in solid, the remains seasonally persists, for trends inventories pig year positive zircon similarly and markets. while Our continue demand levels below remain as outlook the and normal market

unexpected overcome our competitive sustain enterprise optimization these global we remains to our conditions. are maximize experienced investing able Tronox this we With quarter, model, our continue to adverse While are to advantage. to well positioned footprint we challenges and

are We customers. deliver our against our executing strategy safe to focused tons sustainable on quality for low-cost

the into expectation Our quarter with levels. be XXXX line considering quarter. Distribution TiOX remains inventory in second low TiOX with XXXX extremely volumes as the levels, first anticipate challenged inventory well as throughout replenish this of headed GDP chain to line in to remains be for we the need This channels. market in our supply unchanged. by customer supported demand will growth And

sequentially, market year. year. the quarter price Zircon We volumes remainder expected volume review the over and expect I in to turn headwind performance EBITDA the for first that from reflecting quarter, increases. Zircon to from TiOX with more increase rolled continue commodity line increase, of pricing for remain strong slightly the production some the the and benefiting sales orders we to but are demand of now call pricing improvement the to basis on full continue a profitability will operating JF? and second levels the offset quarter. trend more in for to in is expected JF over an we than this our expect to

Jean-François Turgeon

and morning good John Thank you, everyone.

X. slide to Moving

million costs in rate primarily was favorable higher Africa offset while product costs, Favorable including of net goods volume material Our driving congestion. mix, cost mining driven serve and cost of EBITDA cost port rate raw and unfavorable a of on overall. incremental zircon. products positive impacts customer rate, remain and demurrage in higher our exchange adjusted ton. impact elevated, more incur gas, South commodity per $XXX We expense pricing natural to to by drove due offset rate exchange Freight X% to to sold resulting all partially costs, by lower revenue, exchange higher than impact to most growth including unfavorable due higher across increased the

manufacturing ton the QX sulfuric coke and As acid, prior nearly cost gas, compared has largest chlorine, from to increase increased per XX% a electricity. reference, natural our the year with TiOX

are we product market all ability we pricing line. continue to implement to However, the across can continued feedstock solid due margins confident to favorable and position improve our demand,

meet committed us our become to Slide an our and executing review Turning vertically against our to is continue our low-cost our executing produce to financial customer enable integrated sustaining We to and to our differentiating business footprint. supply strategy target. to to customer our I and for our optimize high-quality strategy advantage ensure remain will XX. global global TiOX pigment Foundational will leader. for strategy integrated of global footprint our how security

production increase upgrading critical. integrated to when to time with planning XXXX. and a of continue year and rate at TiOX will XX,XXX up are this mining operating at produce our feedstock additional high tons combined facilities allow Our versus capability to run This us

and Our to effort through be our capital strategic projects. mining expenditure like pursuing to our continue newTRON dedicated will and projects objective

Our deliver unique industry-leading performance. strategy industry assets our the our leverage position to our continue leader portfolio to allowing to optimize ability and most us drive secure to adaptable TiOX resilient as financial our

newTRON in Turning capital global project, growth first divided as they strategic under unlock two cost to that multi-year will now we categories: second and key project. first project related transformation digital assets. the saving our capital. value our is integration newTRON bucket. from If vertical the capital can Slide and future be our fall capital; XX. strategic look review being at the our creation will I major

to relate sustaining vertical our bucket integration. second The

in South rutile extended our important area is investment production and is as as in represent where infrastructure extension elements reminder put to place synthetic mining the in Namakwa the half differentiation have extension in mine Namakwa of The and source this Fairbreeze market other beginning supporting plant represent our which feedstock the sustain mining the across life sustaining Snapper/Ginkgo and also high-grade processing is and ensure portfolio. suitable beyond average Our Africa natural anticipate in model future and of investing In internalization in our to projects, saving XXXX and we phase abundant XX% $XXX mining business they expected XXXX reach zircon Africa. of advantage. XXXX. The mining pigment the $XXX life. are next per for Atlas-Campaspe ton critical of to for relative ilmenite online $XXX resource the Atlas-Campaspe a next mine rutile that come in slag end and second in replace Australia XXXX in production. These mine we will direct of in Atlas-Campaspe in will total, feedstock or million will high-grade our phase investing to in high-value XXXX over our Fairbreeze South new respectively sustained Tronox million price.

elements and our would customer. for remind remain to will producer this like Tronox. review the business, TiOX XX. why investor of various to newTRON the us transformational of to is Turning lowest to our Slide cost enabling I service and so among project newTRON enhanced transform

We system chain, in and enhanced supply improved of will catalog put an efficient the achieve allows management this maintenance enabling invoice, global process. handling throughput in purchase through and savings XXXX. and automation of procurement our optimized and vendor The globally place order new standardized in in optimization result million activity $XX spend,

and as has today. As continue to to of at This enhanced example an program of increased in led uptime chlorinator consumption. result see we stabilization has the our reduce Hamilton coke also trialed automation, being plant significant a the of

initial this plants' mean improved practice enabling very Day. our schedule facilitate employee benefit, better all by area, for in downtime. process data visibility failures to production of and which of end It's to come -- others. Tronox the excited and from The from for four reviewing XXXX visibility at $XXX lead these we decision-making. to of plan one shareholder. function streamline which equipment what detail means to site saving and to the delivery to our will forward capabilities identify across improved future have best and ton optimize order anticipated schedule clearly the our and look transfer these Investor are will further maintenance per Efficient $XXX a and before our also about maintenance We to results Standardization

update provide in I'd Finally, on operation a like brief to slagging our Jazan.

according is at was progressing ramp-up The first slag plan. stacked of the The end to November.

the continuing slag more strengthening where the operational produced Tronox time, to impacting tight at fully a Jazan are integration make TiOX condition We are competitive feedstock our industry At at Jazan a our facility. vertical would utilize strategy. by Yanbu

continue ensuring and site to We ramp-up to sustainable forward from here expect the operation. a safe

will the will sheet progress outlook. the to call market update balance I now over our We keep the Tim and on to Carlson site. the of turn Tim? cover

Timothy Carlson

the of financial On an of stated We range two JF. slide overview of times times provide we XX, within ended first capital liquidity our three resources. leverage with you, targeted and position, Thank previously X.X quarter our net times. to

transaction of costs. quarter $X.X $XX with Depreciation, early was billion liquidity million Capital in projects first equivalents, totaled outlined. the amortization across in in announced communicated the quarter quarter announced maturities quarter distributed $X.X billion by cash the obtain extended which the while available well previously million ended including $XXX in driven debt, refinancing and with completed global as XX key to debt our $XXX target is in expenditures first expense JF operations. cash we March $XXX million total depletion the our and was increase in the million. and us While lowering second enabled Total and interest as the early April

to share the through form million dividend Board flow the February XXXX quarter. at the We paid under dividend second Our $X.XX in shares. $XX in returned cash million program per which X.X November buybacks. free repurchase by share approximately of our We to repurchased in the authorized We the totaled our the remaining beginning quarter out XXXX. beginning to quarter increased first first with of million cash $XX earnings. shareowners million was is There the strong $XXX share due

like XX. outlook. share slide our to Turning now I'd to

cost to anticipate in inflationary backdrop prices supply pressures commodity expect We the Amidst solid not As both and abate. including Ukraine. the pressures ongoing John geopolitical and of continued for mentioned, to significantly do inflationary instability chain trends we demand disruptions, TiOX remain zircon. elevated

increase year the fixed cost the of through absorption production and ton. improved enable per end in However, planned lower will cost the help our

headwinds cost to second are $XXX quarter adjusted These sequential offset driven in rates EBITDA zircon partially expect We constraints. from logistic to production volumes by pricing, increases million commodity $XXX be and expectations and million. inflation by and

year unchanged. EPS adjusted for EBITDA full outlook and our the adjusted For diluted remains XXXX,

investments a updated $XXX begin expenditures of to to of our $XXX working million increased as million well capital for inventories continues follows: to cash updated use expense as million cash $XXX reflect updated assumptions reflect integration taxes to lowered to $XXX to $XX by higher to million expenditures Campaspe. vertical million have million we to use upon reflecting Based we assumptions $XX and rebuild Atlas as interest We net capital primarily to the cash costs, a increased levels have best for as transaction. assumptions increased current Jazan normalized cash more cash to be rates well based to to outlook. refinancing upon favorable more to outlook represent to as our $XX onetime million. interest market we updated estimates $XXX cash minimum $XXX our year and our $XXX the from settlement free slag. million We flow the of We million These million produce these

We continue high-return per expect leveraging attributes. line, runway remaining to growing and to our projects, significant see expense reducing earnings expansion through disciplined by top management tax capital the on focused ton see our cost and driven ahead

review Slide XX, allocation. briefly to capital Turning I'll

We continue value projects reviewed for to significant capital near and with have in for expect driving to expenditures prioritize future. we Tronox today the the

free remaining and levels service continue opportunistically reduce repurchase flow, anticipate dividend to the shares. cash debt to the we With

estimate to and be call strategic expenditures and XX% capital over I'll $XXX $XXX turn million our now capital returns projects maintenance XXXX reduction million. and break cost of remarks. in annual follows: growth million, JF capital small integration other XX%. forecasted back as the between expenditures in of $XXX vertical We for Our total million, projects maintenance $XX on safety of inclusive sustaining closing our million to to of down safety and $XXX investments capital of

Jean-François Turgeon

Tim. you, Thank

which of remain page Slide key our XXXX This focus area earnings call. year from XX. unchanged our end to for outline Turning

As we today's to last is years. without moment up the to several Tronox This want commitment outstanding our employees. our by throughout organization in acknowledge a be I to prepared wrap the position due possible not take remark, X,XXX the global would

you With our are our and position, we commitment your of confident our So objectives market to everyone effort. ongoing to execute thank on our deliver our our portfolio for on assets momentum against and to stakeholder. ability in capitalize

XX. Slide to Turning

of practice XX Investor operational We presenting are the detail hold June look on business, second strategy, to ESG-related financial to more on key long-term our Day forward aspects planning our and and more. and

We will remain bright. company challenge like while prepared current questions. I'd our future Conclude continue With the which ensure macroeconomic turn the transforming over our to to our for navigate remarks. that call

So Juan?

Operator

[Operator Instructions] question And from UBS. is you. Josh Thank your comes now line first Please, Spector line the open. the Josh, from of

Josh Spector

Yeah. my and increasing XXXX year, Can and there? guess on risk at trends your limiting you that to the or more normal buck the sales for this increased Hi. what's flattish bit quarter-over-quarter. outlook question. expect factor production And year I of first comments later on more biggest benefit? your volume Thanks taking to just volumes, you TiOX do comment this is a about seasonal little a

John Romano

Yeah. first norms. quarter, first outage QX, the we were range we is inventory did great on orders about referenced seasonal on quarter. a below the stated -- again the the are the the of our volumes our a impact quarter the top seasonal inventory. think in And getting And our had is which an When up we as norms. about inventories into out Thanks, where of our into were below you -- end in job team going Stall our first Josh. going We X%. We had reality at our call,

what meet it more try our up say of demand some the not volumes, the and we're that extent it's this at If to think flat as tons to to far the And around the as related be. address believe half your that's out ability be that. get about volume. related question the well we our quarter. right looks possible say of would QX. of come ability second And going and keep demand. some to that that It's it's now, have in moving we logistics did above just it's number more could QX we we this part to to issues of I quarter of would actually opportunities will and XX,XXX So -- But the order demand. flat And into pattern, make to -- start the majority and to we volume tons additional look to that in with we is above our latter our

some the inventory So we about meet the we call. We customers. to on working still make sure of talked build capital our demand need can to

and the meet to we're year moving volume of half the confident customer into So increase will levels. that our outlook our still our in demand help and second service us

Josh Spector

kind curious, benefit there just moved zircon demand-wise you really pig I trying outlook And the on helpful. incremental into I'm that for if discussion if iron. is this there's about frenzy that's of of quarter. there, sure a mean about, That's could not side, point? guys. seeing, lot you're very not Prices And is pricing the of the in obviously or baked coproduct Thanks. that important up think your really an a to higher and side. you comment really on But flow-through sequentially still on at that about what

Jean-FrançoisTurgeon

Look moment in we Russia Obviously, will linked two of ore. Josh, obviously, at assumed haven't the of always price conflict the iron those happen countries. know And Ukraine the pig know iron you JF pig So And, we conflict. has would seen what with to iron and we it's as up that the Look, production move don't iron here. of pig is coming that significantly. case. the out have limit remain

we produce what But pig market been to our relation with we're that. the will selling from we assumption for we've So and benefit we're in happen I price price. the cautious not bigger influencing mean, iron. everything of in

John Romano

it locked I to quarter, are when on we about already second But in. the contracts kind the tail say mean have We're Yeah. moved. prices that of of think that most And dog. suffice those

continues. in the but upside half that's of probably pricing -- to the is there JF's back point the So conflict factored if is higher into year QX that

Josh Spector

Got Thank you. it.

Operator

you. Thank

Capital Please, Our of comes BMO McNulty John line is the now from next question your from John, open. line Markets.

John McNulty

taking my Thanks Yes. for question.

first and the get would Europe. noticeably a outlook be has just reasonable side can exposure to understand us on How gotten guess, energy I one So, given difficult. you've more I amount you energy help you of balance guess, just Europe. Obviously, in got the demand? to we in versus what just need should Can still pricing be so think think looks economic you terms there? through assets? do solid backdrop what the the you about you the to pricing European given And how fragile of

Timothy Carlson

John, for the it's Thanks Tim. question.

energy Thann it where year. an given relates part Stallingborough then As largest we've for in exposure very contracts the Netherlands to the natural in in in approach. place Europe, gas a industrial is and smaller France in the got similar of and And it's as our much park forward

in forecasting exposure. last We're have over about recent And for our the hedged are uptick today the that and place market given of to pretty much just our week. are forwards where currently forecast QX at We is current XX% the level. prices

pricing to anthracite it than just in current the in as So forecast across coke and for and also where in are sulfur sulfuric just that China now year. pressures given of not exposure price Brazil I'm a with of in the the lot we of not relates from some gas, seeing rest sorry more offset the but board. the pressures natural really Europe increases in we're acid And in right cost our the

John McNulty

it. Got

to is line? you about get newTRON overall. or all or right -- on so. you've How around to way price should the production two the just Is you think XX% actually the mentioned it over about savings next cost earlier up the that, and When to helpful. more some the some And newTRON. XX% of production, cost the think offsets think the about to then cost I to than year got That's Okay. or you've newTRON enough that Like actually that? expect so get about higher do had price for bottom eaten production offset fall that up got to the we of that does of of savings

Timothy Carlson

that in up as chems that cost actually relates John, chems Process it XXXX process are XX% and energy XX% and focused primarily year-on-year. increase in to utilities. structure energy cost utilities is

mentioned, we bottom the As help from and price the I we is our that full newTRON drop anticipate benefits range. costs remain line, in cover confident one will do which reasons year able are perspective us to that those a we to of the

Jean-FrançoisTurgeon

we improve. margin why to expect our that's And continue John to

John McNulty

Got it.

I Okay. forward squeeze helpful. Is a that number CapEx last a bit that this function little one higher. just I if of CapEx Maybe or bit where can No that's inflationary in. is the future inched of pulling you're one trends, noticed general a into year?

Timothy Carlson

John, the it's former. inflation. It's all

John McNulty

Got it. very the color. much Thanks for

Operator

Thank you.

comes Fermium open. line the of now next question Please, Our your from is Frank, Mitsch from line Frank Research.

Frank Mitsch

Was Thank into spillover XQ? you just you much. I you. there Thank so was curious impact in XQ? what did size the any Stallingborough

Timothy Carlson

us Stall back The outage quarter-on-quarter. $XX be Yeah, first issue Frank that the unplanned obviously cost in and up question. running We're about will extended the million the for quarter. a benefit thanks and

John Romano

bit the And due we -- mentioned in as little QX inventory. Frank the lower to of then a a flow-through there's

Timothy Carlson

impact The cost. impact on on revenues, no

Frank Mitsch

speaking And costs detailed got just and process you, have chemistries what of been inflating. you you. Got

lot chlorine, been regarding inflating And has your that the you. mentioned is is for curious a talk there? your ability chlorine going ones source there's you of that Just about chlorine? in Can what Obviously, to on one and outlook the you availability business.

John Romano

this bit at chlorine globally, have particular any our problem don't different getting footprint stage. but a Frank, upon depending we is chlorine plant the Yeah,

stage were but issues, quarters having something ago this we couple night. chlorine at at is of a some availability not that of So, keeps up us

Frank Mitsch

much. so thanks Fantastic,

John Romano

Thank you.

Operator

Thank you.

of from now open. David is Begleiter the comes Bank. from Please your question Deutsche Our line next line David,

David Begleiter

morning. Good you. Thank

what's pricing, both TiOX on Just full for year? QX your and embedded in guidance the

Timothy Carlson

those the of see in the to well. the pricing to move where QX. year the provide up But as expect And demand to in is half up we considering we as second what moving operating can and We've don't numbers is guidance in clear would expect half it second in. locked percentage environment we would pricing continue to see inventories already we're We continue with say low as in far increases.

David Begleiter

TiOX Chinese the very over it, your expectation now? right And exports are just you for current Got the what year of half what's there? lockdowns of back given good. seeing on And

John Romano

lot Yeah. Look, But reasonably so now, China slowed had growth what's when down bit high in was right exports QX a a think bit were up from happening little a QX. about you then number. out. a a had -- you the material lockdowns. there's of port, a Shanghai to try so a I'd clearly and to bit in the move congestion move There's say, of

We China. have a in plant

lot We what's a shipments to into had of port. on in a that some port. port So our going congestion now moved the Ningbo we've Shanghai We've in visibility Xiamen lot of and the got market.

able to And I get they the those and amount it's material at it is, we're with -- demand increase would us. this weren't that exports for say surprising super stage So out. where particular

Jean-François Turgeon

very XX% you even of add I months talked at David sulfur sulfur well level have to had And where China comment material record Yeah. the TiOX plant the high a like seen said would to in that we in in since to has example commodity remain the at feed stable John's increased raw for sulfur we China we last by some that, of high was and more. -- three price price the the

you So that's which why acid. sulfur sulfuric export. X.X to a see to level seen. related used TiOX we give China trip tons to about is it's pigment, no never to to make a of that just need And And sulfur, at X.X of make from you ton feel

David Begleiter

very Thank you much.

Operator

you. Thank

Please of from comes Hassan question Hassan, from now the your next Ahmed Our line Global. Alembic open. is line

Hassan Ahmed

being you about per JF. the for year-on-year. inflationary imagine I morning your as cost I'd Good and of as integrated guys wanted is up sort number mean are I far you XX% to revisit ton higher comment being John your inflation that cost competitors.

making get of broadly, to I TiOX these wanted hikes in global in just there in So despite just just curve. you're is marketplace what a terms is are of we price that which sliver the seeing right cost a sense not the money all now? seeing mean of

John Romano

I about not from are may at thanks to that advantage be is those our operators question. impacted And a say of integrate And a making by at per your and sliver yes, actually $XXX there and to internally helps would competitive as that we competitors I ton more think material the for Hassan, your noted we're XX%. above ability us a operating our over money. say vertically costs our prices that but wouldn't now our I us maybe be continue point, all significantly minimum -- to different with competition, XX a earlier. at even use

Jean-François Turgeon

that above you to as used per to John up to continue ton. look our And that with cases we that with should tight now we was it's $XXX. Hassan mentioned. ore in see remember market, even some And happening to Yeah. the goes advantage $XXX say, ore what it Well $XXX, would $XXX what's increase. And advantage

Hassan Ahmed

a Very the seems of more but helpful. of guys that of a sense product because one terms obviously zircon, is in supply/demand in bunch I it seeing construction importantly, I things And none are guys just as get there. white wanted and big, the producer understand moving side as you of was what of what a there anymore. market you of terms of of as hear to in follow-up them, Ukraine parts white clay well, to on big are seeing a being Obviously over clay, it love China would

John Romano

a to our a of touch at think And was fair last perspective, was in I'll -- there a customers on inventory amount the Hassan. about Thanks tile one already the place that you manufacturing Yeah. first. from in lot clay of industry. have

clay was that real there was some early of have So impact. the that an on to Ukraine the out I concern coming going think was

there Fortunately lot the European of a I become reposition easier regions from other world region. the it's think inventory into clay of to clay. a And was

the about that flat, -- a of -- With had that the same XXX,XXX inventory to we to about about service demand. consumption. thing. XX% -- had sales lot it that the regards We believe one million of estimates about X.X because general, market tons in it equivalent, it's much that XXXX million tons was we has about happened, in less think were which inventory I the XXXX, about if in industry you -- to is call talked XXXX demand. our service X.X same, market And that's mentioned was that was about So for the higher We X.X tons. the the that million demand because

is, very got and of would was some our I say, manufacturers visibly some I users, lower Supply meeting tile in So chain including inventory. depleted. depleted. in just with summary, Europe, are you've inventories zircon the

So I think, the market has changed very quickly.

aren't with Our of to some the the a -- bit. issue products all mix bit first the regards talked We about same. order books are in a fluctuating quarter, little the

sell which bit quality zircon. a and zircoa little we [ph] So lower is

and market, that volumes the margin we're quarter-to-quarter the the in XXXX. those As end from little product variance of you'll a very now year zircon some particular about confident see moving into fluctuate segment. But our between and

Hassan Ahmed

helpful. Thank Very so much. you

Operator

you. Thank

of comes your from Michael line Barclays. Mike, Leithead question Please, next line from now is open. Our the

Michael Leithead

Good guys. morning, Thanks. Great.

Jazan. I First, ask to just wanted on

quarter in this expected achieve I think year, half in I'm sure I second this that quarter. to the sustainable last but site not you a of phrase ops said you heard

still is all? moved that So the plan, is at that or

Jean-François Turgeon

according It's Mike, Jazan has still to plan. it's and performing plan JF. been the

had successful Jazan. So year we a of with the very start

So expected second for of half it's XXXX. the still

Michael Leithead

That's maybe bit then just hear. And a great little second, to broader.

trading strong giving right terms. the outlook for reason, have credit But your think like. really or relative like now. a whatever obviously, absolute growth you you for medium-term on quite stock I you You're with cheap seems pretty isn't the the valuation that projects believe a at it and And, market

are or here. improving value guys shareholders thinking more curious, valuation you about how just maybe So unlocking for that

Jean-François Turgeon

go And, detail our is be We'll solid want that our colleague about act lot to So our our obviously, people do increase add. who if business and an my look, we're continue and control. at But, we're and Investor in we in we're value maybe, that I June. a supply believe June we lower strong in that, it Tronox invest. is going our XX. could to a to And to It's start I moment better, plan. a customer, be supplier. all the our what more investing investors strategy to our Mike, to And into this to let realize create costs, I make are our Day to people place know mean, to more Welcome. and planning in will

think, and plan strategy. our that's I So,

John Romano

of are we're there's if they margins And margins. fear undervalued. of think our that quarter been margin the you XXth EBITDA volatile to I lot to I the on on and that of a initiatives. people there year. were to don't spent profile, half three refer back to that about This a is two why as ago. north we've is working into where historically or things today business back that out I move We think stability moving cycles lot still we around point, maybe XX% are that time this higher something think would where second of answer question going JF's to extremely

to So, continue we transformed think, how to business we the have we're we've and confident and I that. that can do communicate changed

Timothy Carlson

in different scenario. downturn. a levers we Investor And item it There model even generate the as number a preserve integrated touch the business relates downside reasonable our operations have vertically flexibility a to of that are from EBITDA and last I that our on will a global that to cash and Day bit can at just really pull is, strength we the of

Michael Leithead

Great. Thanks so much.

Operator

you. Thank

of from now the Our Matthew, your line DeYoe Please, next comes Matthew is from of line question open. Bank America.

Matthew DeYoe

we with how about of given the I the do strength, about Good mean, -- we've how EBITDA dollar talked past? FX in change the think about shift this that should as guidance, a everyone. morning, If the sensitivities think in to particularly we some we've seen, your you

Timothy Carlson

Matt, a for tailwind our definitely of it will guidance. be bit a

The actually and dollar full to But it upside tomorrow. where has FX the might think with fluctuated Where what we rand could quite our changed last haven't We guidance, a Aussie the out. months. incremental happens change fluctuated couple of we is come the has year range. bit is currently

So could we're it place marketplace. FX in tailwind and in what or happens as right relates positive now, a to headwind business depending a a model the our very be on

John Romano

when That range, of the on impact a about the upon would positive one rand elements the depending be we lands. where that could that have think

Matthew DeYoe

like with of that you. to capacity. Thank Namakwa Fairbreeze And then the they're All and come right. sounds on back the expansion going

some to over CapEx expect is with we the XXXX, is mean does should plays think off? that elevated How move consistent out for time? they because -- newTRON this be next this XXXX do few spending how lower So, should XXXX rolling I you or levels, years?

Jean-François Turgeon

capital. flexibility have with we our Matthew, Look,

depending will what start year Atlas-Campaspe for have this those on obviously, we Look can the to projects in sure the just finishing now specifically make we We see capital that we're construction. the adjust market.

mine that it's and will operation. big So in a be year

in CapEx Atlas. more no So for XXXX

return Namakwa strong, Fairbreeze to because see spread markets we the year. and capital start And have invest. so project huge those for for zircon that we because We and rutile want over have early that CapEx the on being

Fairbreeze of on reaccelerate always like those it's move a mines the area. to away Ginkgo like good the and In we depending operation from could in they're those different accelerate. adding those We case pause to of to mine had into are and and existing the mine mine. used and market move XXX production had and So you Snapper kilometers capacity conditions. the to where project to not already Namakwa, But because we are case extension in the

the really which this we're is our we creating spending maintenance is company base $XXX So said the I is a call as shareholders. that's capital that All million to our value what capital. the year really million for why $XXX excess

Matthew DeYoe

All right. Thank you.

Operator

you. Thank

line comes Andrews the next Vincent from open Stanley. Morgan Our of question your line is Vincent, now from

Will Tang

inventories touch just it driving of of And for capital $XX guess XX,XXX greatest This which cost kind I mean then are you seeing buckets I my and And I what's in XXXX previous what working a Atlas? from cetera CapEx. guys to kind like follow-up at cost rest Is labor guys. et Hi, production? year? can on Will Thanks. the Vincent. Tang question higher the of for Thanks question. extent guess then is inflation locked the also related guys of is to for cost related that needs to on the increase ton mainly heightened of just kind the equipment in on a kind taking you in year? that for million

Timothy Carlson

question. the for Thanks Will. Hi,

in costs third third-party wrapping to comes the relates online up are capital That Atlas pressures project the it inflationary As to related primarily Campaspe contract project. early our quarter.

look don't to for And we our above working at capital, our costs got that. we've relates supply we've globally customers. inventory a anticipate make more it inflationary balances taken significantly to of So surety hard as sure

of bit there's inventory up from as given tick it's to So revenues well increased just receivables as go a on a up. pricing volumes and causing improved

as So facility mentioned earlier, that's produce we of a the little to And slag. increase. an Jazan bit continues

inventory as range And lower in we'll the we as a end we'll So the if we'll the higher balance. capital out range. to work end manage well things working that higher the at think, capital the range. be of bit working slag don't of of that have But at end of

John Romano

need because about to we will that's regards producing, with talked well an of talked norms. of We've But element tons And go the be to that inventory. I have about going below seasonal meet. building would we're orders repeatedly XX,XXX there that TiOX of not inventory we all some to suggest we

Will Tang

to like we just expect what is I renewable in the Africa South raw project then is are driven that that methane intentions I material to in [ph] realizing Is or the motivation if currently. reduce Got electricity energy by cost mainly from I'm it. ask difference, emissions could guys your And behind should guess you question. profile? how wondering, of profile one compared

John Romano

Yes.

So particular in of that. attached I significant be online the that force. continue at come is a XXXX to but in most by end some project XXXX that would advantage will monitor from a this of that of there but to to going advantage perspective is we'll full benefit that cost -- not stage amount because say

Will Tang

you. Thank

John Romano

be Africa related cost going Will with The Yes. structures issues in the cost a structure to is fixed we've we had is relatively forward. going that SOLA I South electricity just this add one to to increasing item have to that Eskom only was of and the other with project

significant So we like won't we those do currently. see going increases forward

Juan. that about Sorry

Operator

think I next from comes now open. question the is line Brucker your Please line Ed, Ed of Barclays. from the

Ed Brucker

Thanks for taking the question.

going guidance on to I is there inflation expectations. the be be some is there? for to just upside inflation is flat it the baking in going and right or you one guess leeway for that the first year of or year, my Are downside now full So in rest to where

Timothy Carlson

Ed it's Tim.

a cost we're also relates of and continued standpoint. through both standpoint logistics expecting energy and process from it to chems year, from the As inflation rest a inflationary structures the an

pricing $XXX the In to fact, rest -- continue the that another that we'll offset we've but we're inflation million we year. with there's very relatively for that probably guidance got of of the in that have. And and our comfortable confident

Ed Brucker

But Got it. impressive pretty My was and next one more quickly as goal noted you debt. paying debt on you well. down the that reduction surpassed you pretty still plan

wanted to maybe relative debt repurchases pay see M&A much or to to you'd to be reduce So, vertically I increasing especially just continue to how integrate? to even then you down. quantify, further share if want that able thought to more around And the process

Timothy Carlson

Yes.

cash balance very given of strength the comfortable standpoint of vertical our sheet a the our our million from portfolio. Ed integration and on operating just cash So, we're around $XXX

opportunistically we authorization about to under that the So quarter. we XX% returning that have and given the and buyback high to talked going above continually shares we've program use have continued excess capital debt reduction that any Over targeting cash in we're from the Board.

John Romano

And gross that was of interim billion an $X.X debt target.

reduction. debt Investor a target next as little Day, to talk So that would about get closer we'll for bit we maybe announcing what be

Operator

questions. final hand further We I for over Instructions] remarks. [Operator currently John back Romano to any have no will

John Romano

the our solid the well our our a remains stakeholders to as very concludes executing you to our you summary, We'd we'll positioned our Thank capital In customers to like remains day. and joining on deliver on enhance earlier key mentioned today. excellence our control Tronox have strategy, within demand generate our great focused and continue commitments to on against vertically our you. delivering to That remain call. levers for continue we JF Market for all operational the projects, all and shareholders. to call much our and integrated of portfolio. thank Thank value and

Operator

joining. today's conference much This for so call. you Thank concludes

disconnect now your may You lines.

Tronox (TROX) 28 Apr 222022 Q1 Earnings call transcript