TROX - Earnings call transcript Q2 2022

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Operator

Thank you for joining and welcome to the Tronox Holdings Q2 2022 Earnings Call. My name is Brika and I'll be your event specialist on today's call. [Operator Instructions] I now have the pleasure of handing the call over to our host, Jennifer Guenther, Vice President of Investor Relations.

So Jennifer, please go ahead.

Jennifer Guenther

Thank you, and welcome to our second quarter 2022 conference call and webcast.

on Co-Chief today Carlson, Executive Officer. X and John Chief Slide Turgeon, Jean-Francois Officers to our are call Romano Financial Turning and Tim

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

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

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

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

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

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

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

John Romano

this by and everyone, call of morning, I'd for start overview joining to you a good thank and Jennifer, Thanks, the morning's Tronox. stage quick today. like setting with us

X continents. X producer X plants, across X vertically mines, upgrading TiOX integrated the facilities largest with world's With pigment

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

base X,XXX of supports our globally. of X.X million pigment capacity Our approximately tons customers well-balanced

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

Investor Day capacity. generate as we're and an Tronox in where world's the of years In we review the heading. producer tons approximately XXX,XXX of TiOX, second addition to zircon We with transformation the largest value to over significant several held also of last June

the We of generate I about haven't for proud the and and webcast listen value learn replay our already targets. a that will initiatives of stakeholders. financial are created to invite very you our strategy, organization we you to continue the and have to to and our we mid- key long-term more

was our for an Now quarter. a above this earnings of the slightly key adjusted to XX.X%, Adjusted business Evidence of the consecutive a review of and through Tronox our variety EBITDA of row exceeding million, adjusted than X We expectations. margin highlights. This the let's Slide range, that resilience XXst seventh XX%, greater margins of and delivered were a margins above achieved of where scenarios. a EBITDA of quarter economic turn and $XXX quarter in strong our XX%. guided margin achieved and strength EBITDA record midpoint the performance we

million per first a of $XXX adjusted in We another $XXX digitally half, rate billion ton the benefits basis portfolio, our on included run integrated expected XXXX. projects. also transform we the model. of business by is of basis, of achieved EBITDA to our newTRON, to global of generate key which This savings to to project a capital end our on $XXX XX-month the vertically a and earnings potential our trailing In invested $X testament demonstration

call. $XX We to and in Atlas Australia, the return We Eastern mine invested in investments year-to-date, dividend including the detail in in in review JF will our South share mining million more later Africa Campaspe also payments. shareholders extensions repurchases and these and

year over the to accomplishments and advance the leadership June, the in has company in published our last protecting the role our sustainability we highlighting projects Finally, report and significant achieved XXXX ongoing sustainability environment. the

Investor this and project at and Turning announced we renewable earlier accelerated targets to we South by carbon have in Slide neutrality our energy company. across that updated Day, X. year enabled solar Africa as other reviewed numerous This Turgeon the our ongoing we year, initiatives

harm. of XXXX zero XXXX, XX%. And reiterated greenhouse XX% XXXX has gas goal updated by of increased target to now and of reduction our remain emissions external to incidents been by Our we landfills committed injuries, intensity to dedicated now goal XX% zero of to has been reducing the initial goal our by XX%.We zero initial by zero waste and

for We and and website gender planning. are of and diversity report balance also on on XXXX improve I sustainability succession our workforce, initiatives. you these other review our the striving leadership more invite our to to

is second Slide X, X% of million $XXX to pricing. $XXX year a million of to revenues. TiOX business $XXX further increase Turning versus of operations our XX%, million, the improved of of in higher increase by Revenue prior Net of quarter the I'll the a from that allowance tax our highlights. valuation briefly an earnings million driven income financial model reversal due which it Income of included our $XXX evidence was review primarily and represented Australia, portion generates. strength deferred a

Our XXX% to effective reversal. tax due rate valuation in allowance the quarter the was negative

the rate Excluding this effective extinguishment, quarter on loss our and tax was XX%. second debt normalized

the increase product second our increase in our quarter [indiscernible]. an was a diluted from shareholders $XXX favorable through of share Our to was million delays. of GAAP XX%. pig per in volumes increased the logistics dividend QX diluted $X.XX, favorably EBITDA and we rolled points XX% to XX.X% that volumes improved XXX EBITDA mix and to payments. earnings will margin and given share due these shift repurchases earnings from from earn our share of pricing iron driven adjusted by finally, returned The $XX margin And unfavorably basis represented Adjusted to into and contribution QX million QX and $X.XX, QX margins lower per shipping - impact

X. Slide to Moving

prices by Pacific, local basis dollar partially selling decreased in into which X% increase volumes X% from a or Sequentially, by X%, in currency dollar volume in basis. to translation a the U.S. chain expectations, relatively driven that in to U.S. a a increase to XX% sequentially, declined TiOX pig to in pricing on revenue on inventory of revenue lower currency zircon ongoing logistics local primarily the unfavorable across continued due selling and solid by was in pig a our offset basis, TiOX South driven Asia quarter, Africa, Pricing $XXX or the $XXX driven from while both third the to XX% Compare came communicated from the is commercial prior in strengthening X% by While Revenue offset XXXX, increase increase due million, was by Australia Zircon XX% average in volumes by was X% impacts, orders the remained flat to year-over-year The average and on quarter, quarter, volumes, rolled challenges expectations of lower supply execution demand our the and weakening selling volumes. the Revenue a due in revenues decline due $XX prices, million, The line. prices decrease on zircon the our increased iron year a declined higher to in in driven relatively average volumes. below prices. a previously. average quarter selling and offset iron logistics Volumes XX% U.S. with by dollar volumes challenges prices were a regions. slightly TiOX a partially prior sales to due higher by was from other average in our the in as X% TiOX strategy. increased driven primarily selling quarter of sales million, we've basis an line X%. the headwind shipping euro. versus decrease products X%, was across delays while

Asia deliver expect customers to Tronox's model integrated to for the to through Europe and conditions. inflation, Pacific our of global challenging in though and our second At our the majority are end year, and enter execution in strong we steady given dynamic. of to changing we and agility. market ability across operating to macroeconomic performance us despite we this see allows project stage, As and that markets remain continue continue solid position quickly the to our confident that half footprint demand our we we increasing demand Notwithstanding, conditions financial business adapt

of choice. working of the dedicated to Our employees to right is ensure supplier team be we earn the

low-cost model our optimization enables investing we're our us enterprise to advantage. competitive executing quality, tons. global against Our sustain on sustainable footprint, and to and safe, maximize to deliver focused advance our strategy We're today

globally in third order the contracts. margin third volume quarter second ahead levels to across relatively currently books. stability line pricing quarter, based what we're quarter, and anticipate the agreements we with the in TiOX be to categories, will continue the increase market all into volumes contract on TiOX XXXX our including In seeing Looking and

pricing over Jeff of line third the long the Day, supporting sequentially. quarter to to volumes and going review to outlined strategy forecasted fourth our call over quarter. term for our while the from are Investor increase to Zircon expected in is optimizing to in the pricing JF benefiting the remain in quarter the stability and increase Engle volumes levels, profitability rolled performance are production our with forecast and operating turn And pricing initiatives. As at sequentially, from orders second margin quarter focused remains on I'm JF? now

Jean-François Turgeon

good And Thank you, John. morning, everyone.

X. Slide to Moving

pricing higher was all to commodity serve growth of customer, and lower across This EBITDA increased rate. including offset favorable was in by our products driven higher addition partially to volume. $XXX adjusted Our by exchange cost to XX% million costs

John mentioned, elevated, in a had the quarter to to from We costs in product rate lower second incremental pig Trade mix, due also sales favorable largely iron of Africa. benefit South as impact as remained margin.

basis. on While continue improvement FX African the a FX revenue. in favorable versus than a to costs Rand net This Cost weakening been production increase, on year, impact player year. offset in has dollar impact production space. a sequential drove significant had other the in cost unfavorable South EBITDA different result a commodity impact and improved on Australian to and our prior translation to costs headwind more no positive The

of have the half half first Our the XXXX, gas, from of increased major acid, material sulfuric coke natural the electricity. costs to with from first increase compared and XXXX largest chlorine, XX%

are with the is driving leverage to generate the we adjust due year rapidly this result quarter to of Consistent model Our we goal, our optimization our second can another expectation to demand, forecasted performance allowed market model continue vertically record the high EBITDA and model enterprise adjusted change. increase. XXs the and market our to margin in next to us pricing record in continue for our confident, flexible half quarter. long-term our has This business in integrated

Slide XX. to Turning

of implementation we are and top initiatives The As investing support undertaking reviewed saving enterprise. newTRON across strategy, the our to yield long-term two entire we Tronox will newTRON are at across bottom Day, to key mining in Investor there our asset.

We grow from total have of already run we in $XX initiative ton rate million savings with savings, recognized the per XXXX. by value over significantly between this expect to to savings $XXX with annual in procurement $XXX time and end approximately XXXX

supply we long-term supporting Tronox $XXX $XXX in sustain anticipate XX% our to side, internalization feedstock secure investing are $XXX to which average, high-grade across projects, of to mining per to relative feedstock. market XXXX the ton feedstock, will We million On price. now $XXX investing mining saving million of

Ginkgo new next secure three in reach new Atlas Fairbreeze since to is Atlas for Campaspe and sustainability are or mine South practice pigment South ensure ilmenite year that XX. in mining reminder, elements beyond important beginning and mine years, Campaspe being would XXXX, investment first These in they in and represents in XXXX. the Australia the extension the phase vertically indigenous in processing replace Campaspe, sustained key will next we rehabilitate on Atlas investment as also the resource plant investment zircon in brought best-in-class Fairbreeze with mining phase of mining area, next These production Slide mine XXXX end can direct to to extend mining rutile, year currently mine and you production. are portfolio online natural and XX and investment next in place will this a and Campaspe replace page. will of the the Snapper other suitable this slag life that reintroduce respectively, Namakwa and life represent high-grade have as Namakwa as the XXXX our see The XX-plus integration and in XXXX. in for where The the the or plan. Africa. infrastructure extension our put for Atlas in level area over our high-value mining Turning our the Africa abundant about rutile, Fairbreeze synthetic the

align which in of to excess We significant to our and are provide and years. than of strategically managing cost integration projects less long-term revenue our These XX% vertical opportunity deliver in are tenement additional savings. expected will requirement, with IRR portfolio five mining payback

today positioned making are to to future in capture We growth. investments order be

million We of rest investment expect approximately of expect to XXXX, when on end until years. the of significant XXXX invest XX this next the mining mining $XXX for a the total complete project to we for

ability spending and nimble have ramp we as pause our However, the to market be demand project with or up dictated. can

Turning XX. to Slide

producer and to benefit. NewTRON on realized previously is customer. our and us remain TiOX transform enhance service our business, based The the to enabling project savings already among lowest-cost prefunded cash

optimized That an roll-up and Day, global to chain, we into As are savings automation tracking and efficient a main model. spend, very maintenance in supply four you Srivisal heard at categories detailed enhanced saving process. throughput standardized anticipate from John Investor

by forecasted implementations supply Russ across Investor which saving. planning XX% expected automation integrated and XX% drive XX% savings optimized include process drive under remaining reduce majority of anticipated improved catalog, site, system such to will of the And the at is XX%. standardization purchase control management Enhance which maintenance, enable data of and function, optimization decision-making of plant our the saving. is enabled better is a of forecasted that as new technology our invoice finally, including the handling advanced review automation, drive downtime drive and at our which that expected vendor chain will of visibility model, at Efficient to Austin Our our to order saving. Day, business to is at just

and cost We of reduction volume by expect total contribution. the from approximately to two-third driven savings one-third be

entire track on newTRON testament by line remains the in dedication Tronox team to and and the organization. NewTRON is the with delivering expectations. A

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

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

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

sustainable market the and now our site up Carlson Tim the ensuring over a sheet continue here to safe expect operation, ramp forward, the Tim? to the we'll I on will turn from to We cover and balance progress update and call slide. to of keep the outlook.

Timothy Carlson

an financial resources. sheet debt, We JF. On Thank capital position, is very second quarter overview the liquidity our you, with Slide and XX, billion provide ended of we $X.X of balance and healthy. our

until distributed our $XXX XX and which XXXX, our well We million global approximately on of XX% and including maturities no loans available debt. bonds cash $XXX liquidity on of have no Total equivalents, was financial or million, operations. is interest term total June as across cash rate our significant in covenants fixed

our to is strength $XXX integrated of vertically While million, this million the and below forecast $XXX model. of liquidity targeted level comfortable cash of range we're with current generally given our business

paid from driven the expenditures opportunistically the a our $XX shares revolver million settlement. Depreciation, Capital $XX depletion amortization million by capital the of year-on-year, reviewed. XXXVenator back projects and piece So increase and in JF in of QX million. draw expense down the $XX quarter, was second we with bought key totaled

share as paid first anticipate primarily $XX shareowners quarter. flow declared million in cash second Our the buybacks the approximately quarter the We second million the to quarter, target. use the QX. the of dividends first the inclusive $XX $XX $XX million flow year settlement in flow We million of in cash half achieve in of in full free outpace was the returned order share $XX due paid and in $XX half shares we've significantly we in for form and of quarter. $XX of flow the of returned cash first out million dividends Year-to-date, to million with to second the X.X form cash to our repurchase to shareowners, free million repurchases a free million

Slide Turning XX. to

business while As shifts recent there have macroeconomic the broader John mentioned, remains backdrop, in been sound. our

all monitor a developments thoroughly to in and are quarter all inflationary expect markets Asia consistent market both We for our order discussion across remain to volumes, the latest and bottoms-up to pressures and our conditions. TiOX outlook year. our through anticipate the economic book trends, risks of process we markets, in volumes we projections significantly with are Europe. robust including continue are view We involves the seeing evaluate with monthly to of abate. the in actively rest We opportunities second given third our and do We our current The seeing the forecast. a line developments current not cost status demand monitor demand Pacific trends of quarter to relatively reflecting end identified today

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

EBITDA record another rolled commercial to headwinds improved of are as $XXX to initiatives, result commodity result $XXX in of million. zircon with from the our expectations adjusted investments orders, our million a volumes price rates from partially a expect of in We and inflation. range offset newTRON, These production assets quarter QX a by cost savings cost improved due

relative we mentioned, pig higher previously the third a JF XXs. iron of volumes zircon. the expect do lower But and to in we realize as result EBITDA margins John to in margin to slightly at quarter significantly continue TiOX sequentially contribution anticipate margin adjusted and lower As high

remains XXXX, our Investor year outlook full unchanged the Day. For from

and $X.XXX to adjusted of adjusted share. with confident billion billion our of EPS very range $X.XX EBITDA per range are $X.XX We to our $X.XXX

purchases Based $XXX $XXX we cash, would expense to interest $XXX of of million, and by our to our These slag. upon these million; our reminder, minimum million and current million capital our year represent expectation to second million million. expect $XX our of $XX for to best assumptions normalized driven rebuilding flow use market the $XXX continue cash cash $XXX Net Jazan million more we uses the the estimates to $XXX onetime use assumptions, expect million. our flow add million. be of half inventories of taxes are outlook. a $XXX free cash of in expenditures to back Adjusted to be as cash capital of for cash follows; a levels be As year working $XXX million upon to to free a cash of based

reminder, ensure have sufficient Day, reviewed any we under to liquidity a scenario. we ample and at As levers Investor as conceivable

Our sheet we balance manage capital expenditures are and the flexible, can generate to cash.

Turning to XX. Slide

return expenditures, future. will exceed with our The We by return for to focus share projects these across through our value to threshold continue in Tronox, Tronox sheet. and be capital returns allocation grow drive three repurchases significant will be supported Dividend returning to expected customers. capital the balance of on increases projects value Growth annually. capital today XX% our evaluated and and be expect After near-term the expenditures with will areas: near the our to dividends reviewed and key shareowners both we've to growth, allow will priority.

to continue repurchases under share February million cash permits. through XXXX expect We the $XXX generation program remaining as

the our target X.Xx debt-to-EBITDA XXXX. at that We achieving anticipate by Investor Day announced Xx end net we also to of of

to be a an will now closing JF share quarterly repurchases allocation on next anticipate basis. back split for debt turn repayment evenly we X.X annual years, While or we even remarks. do an the over fairly equal the call I anticipate not and over to

Jean-François Turgeon

Thank Tim. you,

and to to XX. operational Slide remain excellence to focus strong capital execution, We key outline for This Turning shareholders. committed XXXX. our page returning area

taken would owing our create I more several to business, fundamental in we to remark, prepared without today's be reiterate to our years take moment global up resilient a a want the This wrap we the and over possible enterprise. the not to action dedicated stronger last employee. have confidence our of As

you to everyone So effort. your continued thank for

like are turn to prepared to With delivering for concludes over to executing We committed our questions. call value that, strategy That the against our remarks. stakeholders. Brika. I'd and our

Operator

today [Operator line Instructions] first Deutsche of David the go our phone on We Please have ahead. Bank. question from Begleiter

question. You may your proceed with

David Begleiter

price spot Asia Thank to morning. John, JF, you. weaken. continued in Good

XX prices? they're Asian dynamic down weeks. firming How still can think We I long rising Western spot European and move or price last see U.S. XX for the following prices higher. continue this but

John Romano

in So talking going lockdowns a still Asia lot quite happening has exports. they've the how on a about Chinese look, lockdowns Pacific little they've frankly, do what's up the There's Clearly, bit are to over ended. gone some as with there. people

slowed down. So demand has

housing of Some the created impacts on the some in effects level also have exports. China of

seen exports, facility. we're of have So that out we exporting

We quarter about in our have the to still plant We momentum pricing. positive and the out improvement I it of higher your types. mean in for that all seeing across third was it on China. in the will all be saw our - To quarter comments is higher specific in question, quarter. prepared be than price talked of we're pricing We third our the contract regions second across

our So I referenced contracts. and margin volume stability

particular volume variety could more We're stage, this the way that this That's scenarios we next. a from FX good pricing say, we're already the I'd out had stage it's negotiated. because our at So at quarter. feel focused on quarter range still through put about one were and the roll that the of third But confident why built it. forecast. into in that predominantly of we the different to

David Begleiter

to just quickly, talk you China, as And in can zircon Understood. right that demand now? trending

John Romano

still so understand. happening fill. Yes. we to are it's to That being not good orders more than think what's China, for we for in you getting can said, we're immune Look, requests I but

talk anecdotally, that of think people I So XX% the China. zircon consumption to about goes

impacted that only our For of more XX%. ceramic And is elements. which of housing the to us, market, volume it's the goes actually XX% by about about XX%

more, down requests volume that regions got invoice where So China to and world, can we're in for we that when we accordingly. more so the of placing even other about orders, volume seeing those were if we've slow think we're

Jean-François Turgeon

zircon because is there's add David, produced significantly production mine more it's less demand story that and to on no mine The the to and has a project have story would basically happened JF. zircon what I world, been added yield, a the supply and of all that. new have zircon than And less been capacity. there's new is to zircon around story has lower

we're our that's So zircon very why position. confident in

Operator

now We from Spector next UBS. the Josh of have question

You may proceed.

JoshSpector

Hi ask fourth guidance. to taking wanted my quarter on for Thanks questions. implied everyone. the I

up if lot. are quarter that, It's sequentially kind pricing. look fourth So Normally, to a volumes to down. you at it's harder of flat get

Just control? curious top that up that up what guidance? gives of you What's conviction be your perhaps plus XX% get or the sequentially not? What's earnings to to in end could your

Timothy Carlson

Tim. it's Josh,

QX volumes confident looking Just that due and to We're at QX. quite thinking savings in improved QX, specifically QX, you higher you're in over commodity volumes, which for see year cost incremental pricing production our just newTRON, our gets full where to isolated we're given from absorption some favorable anticipated FX. reductions guidance, to starting

John Romano

the quarter, we some right? do And with range of on volume the look, third has a - that Josh, have to And there, expectations.

are period. knows been to Specifically, this holiday a There for will with and one hasn't going be there in - go going couple on a nobody really of quarter people what's Europe to happen years holiday.

that So forecasted do you look have we a that feel assuming depends might numbers range. worse. little move as additional up be the about about of think those are move what benefits at newTRON, newTRON through specifically, that than we year, is And to reality forward. And lighter may because it we ratably dollars we're and those on are when it will newTRON, be they the of talk the that But a are bit probably but the lot little be to going put the volumes we a EBITDA. in bit the reflected balance continue where we confident we

Jean-François Turgeon

have is Campaspe Snapper/Ginkgo that producing than less mine mine down. start were the obviously, also it's And - that more. we we And Atlas expensive and a shut

those So our QX, Josh. we're explain confident in why

Operator

comes question from Capital next BMO The John Markets. of McNulty

Your line is open, John.

John McNulty

my one taking quick questions. just Maybe housekeeping one. for Thanks

was. over the you the that value can QX rolling from to zircon on Just what that's quantify of XQ,

John Romano

close The of rollover to quarter-on-quarter. $X the role. to $X EBITDA tons is Relative to that million incremental million

Timothy Carlson

there's but about still that planning opportunity out we we're When be not though, when logistics some getting earlier, it's talked woods rolling. the we're and not to about fair, we And better, of yet. think for shipping, that

factor again, the of a a why range have bit have we that for quarter. the So in that is that's, - a we

John McNulty

Got it.

makes between like year. and Okay. on throughout and ramp in Project the the at that's help terms second the about you No, rolling that newTRON, going to least end you and sounds to that seems us you it guess, us got Project were then it what help was rate cost Atlas continue second benefits quarter - year. think And some can sense. it like you've quarter the can savings I to where in to newTRON expect run for the of through

should So a how the line? it how be little I it through? a Like, thing? we back-end loaded a kind Is thinking of guess, of is bit more straight about savings and they flow

John Romano

it line. of straight more Yes, think a John, I as

million then an to into $XX XXXX incremental reminder, $XX a $XX and coming million XXXX. million As in

ratably will So quarter. that each realized be

of to the reasons So driving that's incremental by that's $XX the $XX million. million one quarter-on-quarter improvement

John McNulty

there. been, of pockets question, you're continue Got guess, seeing Can the push weakness, on one about if can to I your we're just in markets? help it. little better what us European I there's higher. commentary know get a I maybe last then seeing And et throw pricing color it from cetera. bit to At some same you time,

really better So color still helpful. good market that's maybe tight. guess demand on little related, it's is a But would the cost maybe bit TiOX I - in demand be European and look, maybe

Timothy Carlson

regards price you to for We're on price, surcharges. the pushing with not in just - pricing costs. these so made John, about Yes, aren't These based on comments quarters. are we're what

which say, be we in from to American third we flat. little Asia the we the relatively QX. the second Pacific I and bit volume a orders remains, into European the into compared think to do still soft that things standpoint And the the are normally factored still a period. of to factored bit be although it meet moving they're about globally. - That's of likely forecasting said, going on, It's That The that was quarter, were lower knows versus it the a North where we because they're month. going in quarter clearly, little momentum mentioned numbers. strongest in price said it's a of European It And the people had to about again, is numbers. demand So into But we think would is the to that market. inventory be Europe, down pockets. what are really when a August longer take come going the normally solid with would are some what the holiday back. going holiday. to And than nobody little and we're there seeing being I we

on variety takes So I'd the puts Europe. and numbers that dynamic But confident adjusting, put in a we use it's in word constantly, the there's we the in again, forward volume we're forecast. of the and say,

Operator

have ahead. the go Fermium now question of next Frank Research. Mitsch from We Please

Frank Mitsch

And than the are Is there price folks. sequentially, on and margin of Hi, year-over-year get you pricing little your moving it? agreements we the how that agreements pricing have? should bit some your good it's through improvements morning, about stabilization market. if the If various or look perhaps I where behind to what could that at you due wondering have are. How I'm lower that a you open think maybe others your what might be some that

John Romano

John. is this Frank, Yes,

So that. again, economic impact an and our commercial business we've stability stabilize our a throughout margin been try does is very strategy focus conditions that variety on of a open to have from to

I and of remember moving existed we to have months, back course go stability as margin last been that down XX think 'XX have the the 'XX And up. Over didn't much. where pricing in prices

based because a our don't a customers for with in on stability it's their target they're individual has We stability. So that street and agreements. margin a everybody agreement. interest X-way margin have Not

are of Some volatile. still them

have strategy we term, it fact, our a more than mix. would spot. say I So in is But is, longer

Frank Mitsch

Got you. That's at Tim, versus first about very half cash you're stronger second half. flow, helpful, looking John. a your in discussions the And free

terms looks - quarter. quarter second it that roughly of in You like also roughly share buybacks you're mentioned you is the the where the that in in amount paid price the stock is And second the opportunistic today. per

to buybacks? fair that $XX comments is assume in should million that per two this we those - of taking rate it at - that quarter be was together, looking run terms recent is of kind So

Timothy Carlson

Yes, during quarter. Frank, $XX.XX shares buy X.X we second at did million the

cash have generate for cash we deployment. we available As and

definitely at we'll opportunistically share So repurchase. look

Operator

Please The you're Ahmed ahead next go Alembic Hassan Global question when ready. from comes from Advisors.

Hassan Ahmed

been to wanted million. a Look, guidance. sort in hit generate in about guys weak EBITDA. I And mind, mean, guys that QX guidance QX year implied your of guess, midpoint million you $XXX in did the quarter. you obviously with to in revisit I of is just historically need QX $XXX I question in order QX of, million seasonally full $XXX which EBITDA, midpoint has guidance, that to The

EBITDA. comfortable just highest for So, I'm in point the there, to revisit full wanting the makes be year moving over parts so that guys that will you what the QX actually

Jean-François Turgeon

fixed So also think big cost newTRON absorption. We we element Hassan, a production. inventory to We're costs. our that we're I that but is our of feel the pushing working helped good, why on rebuild need

Campaspe in Atlas that and has specifically solid been Africa mine that South that very us. Australia rate, we beneficial start. and exchange new the I'd And demand our have for And basically, We our price. say have customer the for

components are full year very our feel those key about confident So the all make range. that us

Hassan Ahmed

sort could side we maybe the things, availability quickly guys of about in there if you and of go of there's issue out ore And availability some are this Understood. talking over into on that less back becoming half year 'XX. are seeing ore an the of what pricing Understood. because

bit. easing camp which kind we've guys of these secular prices mining stay. to Some ore are mean, operations I you seen to more folks in? me, underinvested of in and mean, have that where a are here higher of pricing seems momentum I thing it that a

Jean-François Turgeon

in fact, I'd [indiscernible], that high-grade feedstock point, new we Hassan, they're And seen going that will and down. it's And talking about increase. in the price some all you say mine the haven't fact price there capacity. to key new your industry, continue Rio to if players in that was underinvestment Look, to to listen all linked that, of

mining place vertical we cost QX In position good capacity fact, slag. And us because have to with a control our we're the have Tronox very continued only starting in invest has in Campaspe to obviously, that the with Atlas one with and Jazan integration, produce who closely in cycles. been a seen plant we part we China important in well. the had having different it you the case China that very And going ilmenite of ilmenite the haven't And market. imagine, as can down of previous that track as price in like price the

John Romano

- comes No, as produced ore lot a of mean a of there produced, are is mean a and there iron reality think less bit, has kind ilmenite, therefore, byproduct. ilmenite the the you ore the just from - exacerbating I bad ilmenite ore I iron iron And Yes. are if other softened is there's a is situation less less it's at being as And which a about equation. market high. reasons

agree would with what I JF said. So

Operator

now have of Leithead Barclays. Michael We

Your line is Michael. open,

Michael Leithead

Thanks guys. joining Great. for

second and you're the the of wanted on the year-over-year as question I given mentioned, dollar the just a Aussie to follow First currency on have in South half assuming a you benefit bit side. what the setup, to just of year, be the you African with Rands. guys up unique

Timothy Carlson

Mike, it's Tim.

year, $XX in at the to back $XX XX%. Aussie dollar Rand the last the the of at $XX.XX was $XX.X to and Looking in range half traded

a terms $X revenue. quarter. overall every much at in $X in quarter pretty from us where give a place from a accounted $X movement range much for that of Just us does bit Because was Rand It million Aussie to year, Euro. on million which hurt The gives implications our overall a in us to is are movement settling gives looking in dollar a in $X.XX every as we've the we perspective. upside. Euro We but get current the and the reminder, little million different our one million last rates, $X

tailwind back So half. pretty us the will for a in it year-over-year be good

Michael Leithead

And then the that areas stay incremental could things something where you think some had secondly, back you're just cost about can to where see you think pressure versus through you just kind of maybe your input half? I broadly kind of mentioned you maybe, in seeing flattish walk basket, some easing

John Romano

Yes.

half had going is And moderate increase. the energy we've a additional overall, some year-over-year in to that We bit second increase JF area That's that see that first half and coming only talked also seen utility of most million quite to So sequentially. $XX process an XX% gaps. about.

acid and some half vary and I growth in sulfur to in the reduction both cost all, and Those continues easing QX, But an be increases of location. coming half. Energy, first increased one as number for we're of costs. net our sulfuric structures, our just obviously as is cost mentioned, down Energy, As given QX in by cost reminder, it seeing - overall to all driver pace a relates overall conditions. tax. XX% to second XX% overall approximately macroeconomic about

U.K. to from it's the material, ranges Arabia XX% in but in So X% it not Saudi

So there's a in there's quite what but of I a know site, market. component probably relates a it quite concern variability big U.K. not by bit itself. spot happening current the overall in bit it's was of to the as

will $X for of rates probably that additional Just the given back QX mitigates and have about at our exposure million $X a are our said, two-third for exposure if that hedged we being in current all, current But forecast, we've spot an benefit with our into but built forecast. it us. be half, that of at million to

obviously is of tax. All that before

Operator

our question, America. of from which to move Bank next on comes DeYoe We'll Matthew of

open. line Your is

Matthew DeYoe

think to earnings And ore tailwinds talking absorption. uplift new then look to a other Atlas we of but mines from you're kind grade switching across up about some analyze pretty So basis? like and have at often Campaspe Snapper/Ginkgo. XX How bodies, ramp also it some industries, to XX the we if when just cost of on ramping see you the XQ, about fixed poor seems maybe should we higher

you that, is guess, year? So this I for why not the case

Jean-François Turgeon

mining. a that we Atlas - start has is mine Campaspe have Matthew, So

So mine started. the has runoff

QX, cost you're Snapper that the we the we operating QX, obviously, had high improve the So moment. And We're and in that, have we'll situation. about Ginkgo because start. still momentum. as in of more talking But will obviously, at this also

John and morning was will geologist excited we stop basically the we're can So costs, and that's and patch received additional about mine. high-grade the I that years that Atlas so mine, is rutile explained we concentrator. high-grade of operation And can the that and high-grade you, I in some progress start area the a the you that year. with picture I said And operating start of he tell bypass of zircon this ore as And asset, benefit more will mine. and spot three mine, previously. think with very you we in a for ilmenite I the very new and Atlas nice and When first

that will an important create a but the was capital So it for it value It's put, look, real investment. we business.

John Romano

to zircon forecast factor going high the the And highest point, so year. that's of system to come is moving which through yield quality. the the through to price. It's towards will It's that end value JF's sales our is very coming prime. into And our going that the

Matthew DeYoe

zircon sorry, to Atlas, also look right. I if above guess all, Ginkgo, we also at were in So

example? So expect year, this you versus zircon like for year do volume for for what growth next

John Romano

have come more we've we supply can too, it place. the thinking - as right. where we're in we start We Look, got more you than to - more chain, so, volume Again, going get mentioned about volume. are to orders

which coming on phase two say the we're ton of of - phase I to it body capacity down will that back comes quality again, comes So to to Snapper that out. no to we're to - zircon volume JF? is over can't and in yield sufficiently the Ginkgo start there, out first very There's be I is three going estimate mining to of to the will grade. - we going start mining going ore early And I volume have more XXX,XXX say to the referenced. in more Atlas would would out. high JF's that's years. the ore in process, that's But specific that's point available.

Jean-François Turgeon

I Matthew, And progress to hard, Look, and color track the the this moment more would that XXXX it able for have. we give look, - at closely. no. as to us it's No, But on benefit give be with year, we'll you we'll for guidance 'XX.

Matthew DeYoe

not lower a know the with tailwinds the cost? similar Or of one earnings there. headwinds can it operating it given the running product, rates. one is negative? from - is just Jazan at or I maybe a in way that but leave neutral of about if Is it's it positive at the the slagger the and thinking furnaces I full Just Is use for I'll more just from two only guess, it I now? in slide right Understood.

Jean-François Turgeon

Matthew, So I Jazan. mean, don't we own

Jazan is task a So asset.

mean, the slag. obviously, So we're I buying

and the slagger agreement have We the from price. we're production market all an buying to at buy

it's put advantage say So a us for vertically always market, that we benefit really for own full price that But when advantage the very we're it asset in customer. having see would our I'd because own slag. good in more feedstock you Jazan Look, tight an And we claim and would position. operate the Jazan. additional paying to have it's would integrated a from being start

John Romano

$XXX about the we And - build capital year. working to million $XXX in million talked $XXX

that's about to some market getting on the get inventory a We that we're from our And we in of that is, the fact, slag talk that feedstock. And need Jazan. tight tight levels.

Yanbu, that the So moving mines around and for plants we're using have selling securing now, this other from will get only or Jazan position right up. we Even the supply longer our our volume stocks though at our we're slag individual safety at

Operator

Jeffrey We of now have JPMorgan. Zekauskas

Jeffrey Zekauskas

Thanks very much.

right X% for about I the fourth light. quarter you're your if think they'd the months is quarter, are your be down you're And down volumes third forecast maybe the X running if - X% and year-to-date. volume for

are I volumes down know, are volumes this running your commodities don't volumes maybe So X% maybe And are Venator's year. flat. down.

growth titanium So there's west. in no in the dioxide

are down. look are down, they're volumes, down, [indiscernible] If volumes PPG's XOs you at volumes

high have So there for they very, is because raw materials And inventories. so titanium this demand? overall the very companies, of shortages year have many of coatings a dioxide in contraction been

as another general, 'XX. in year whole demand of in a case make base of TiOX to you So situation? we do have declining are going What this

John Romano

John. Jeff, so it's

about guess we I specifically - our for the forecast just let's talk so quarter. third And

with flat was of to quarter XXXX. to XXXX So to inventory those a relatively that it's to do fill and quarter third third When we second compare said relatively quarter quarter. very a to we lot ability that actually high second of had our XXXX, the of orders. the the our quarter flat and

year, the on Could volume - into about as QX. period. fourth I happens talked really we second that's in think get forecasting this a holiday what seasonality in there in be So significant same the our XX,XXX a in a time, full on that's yes, of and market. to there's year to a we with year-over-year, growth lot to guidance. be a At still TiOX. But quarter need confident depend the shift in We're of flat moving the half growth why we're just into for going was that the from the not volume, quarter? regards some going peak year still we regular of additional tons year-over-year, XXXX fourth to believe due

has expansion after The So bit. I a think of leveled over. the that happened out growth probably is JF? COVID hyper-cycle don't

Jean-François Turgeon

long west. in earlier, as Jeff, the capacity that GDP the and that new track term. no as the of be it grow And but you feedstock know, remain added question made track investment the pigment. would there valid the no is could year-on-year, limit then Hassan that of pigment there feedstock doesn't was in would new And about still grow. on expansion comment world on It And capacity I Yes.

John Romano

believe throughout one perspective inventory And low. inventory just the the is maybe comment chain more that still supply because the on we a TiOX from

about of kind orders. any trouble Europe, Our inventory is we're talk and having movement with still Even around Asia dynamic filling low. - we

don't supply particular have think supply although I of some at the we stage, think our the representative the necessarily market. this chain fully better. of TiOX chain, So that's talked customers getting about

Jeffrey Zekauskas

valuation the are is Or in benefit then taxes that? it tax there in your just mechanism? $XXX years efficient? what a million next year this is over cash from cash And noncash And the a reversal, five accounting

Timothy Carlson

Yes.

So Jeff, it's Tim.

next that forwards benefit carry loss of the cash years. an will billion $X over to estimated XX have billion of We $X.X us XX over give

then our that and item attributes, in it's cash in cash $XXX is about $XX estimating our to currently in terms noncash we're From give going of million 'XX, benefits. So it million current cash but And $XXX million we the the benefits million. got to for for of us benefits year, be to year, in years. closer $XX the 'XX definitely future will a number cash taxes million $XX to

Jeffrey Zekauskas

what Tim? And last were they year,

Timothy Carlson

XX%. year, Last XX% were to they

Operator

Morgan ready. you're We go from now Duncan Andrew Please ahead when have Stanley.

William Tang

is on This for Tang Duncan. Will

how if about us you I like help plans? year. your much, think be previously, talked volumes that increasing of if Is increasing sales of And maybe mean, half like or from production type production a question, so, in about the thinking XXXX still increase quarter TiOX anything. of won't you think first that? volume you're by But sounds whether like the about the is possibly I type previous thing? increase Can this quickly it fourth sales going through that kind of kind

John Romano

actually and Yes, our our we year. a support for back customers. are also We Will, the a a driver half be in anticipate do do of ton, to of increasing assumptions get going production. is capital year it the that levels driver to bit of for to it's forecast That's back per lower the inventories our need working because for appropriate to cost

Operator

Brucker We a of from final Ed line question from Barclays. the have

open. is line Your

EdBrucker

seems at probably Just done your a maybe bonds stack. noticed, reduction maybe It - me one the I've given you've like remains that on lower what sitting significant priority, for But today. discount. it's although obviously,

of open to debt? secondly, are three buying - at the open bonds as cash you you as be just what pay years the at the with market down of would that And over free debt back flow improves end with just you So level the comfortable in year, next discount? kind then

Timothy Carlson

Tim. it's Ed, Yes.

any As you know, we have until XXXX. maturities really don't

debt. with comfortable our position very So on

there. In so addition, XX% of comfortable - our interest I'm rate fixed is

in You are an at, currently XXs, cash. with we'll the low our it consider share generate well as it's that as right opportunistically trading definitely opportunistic repurchase something something are and in that we're looking is bonds we terms where of

Operator

to we remarks. it more to I'd back John As questions, Romano for hand no closing have like some

John Romano

focusing We're vertically continue quarter. delivering our for our projects and key we're against our we well We executing on today. our thank on our you look operational on joining on positioned to levers speaking to In us we'd capital our Well, delivering and summary, for forward like portfolio. throughout you in control, believe reporting integrated confident to the forecast, excellence to call commitments. the focused with enhance to our we're and results strategy, within the you to

thank you So joining for us today.

Operator

That conclude you does Thank today's again Thank joining. call. for you all.

You may now disconnect your lines.

Tronox (TROX) 28 Jul 222022 Q2 Earnings call transcript