Earnings call transcript Q4 2022

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Operator

Welcome to the Tronox Holdings Q4 2022 Earnings Call. At this time, all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Thank you.

Now, let me turn the call over to your host, Jennifer Guenther, Vice President, Investor Relations.

begin may you Jennifer, your conference. So

Jennifer Guenther

and year XXXX you, welcome to full and quarter fourth conference our Thank call webcast. and

Jean-Francois Slide Srivisal, John to Business John and X, our Carlson, Turgeon, and Tim call Officers; Co-Chief Financial Senior and Vice Turning Chief Executive Finance. today on Development Romano Officer; are President,

on be investor.tronox.com. at using move We website as will [Technical Difficulty] our we slides access the presentation

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

John? X, now to the my Romano. is to it John Moving call Slide pleasure to over turn

John Romano

and and joining everyone, thank today. morning, Thanks, good for Jennifer, you us

five integrated may producer upgrading and who continents. and we're to have be you plants, world's Tronox For joined pigment six across six with the TiOX bit of vertically a story, those facilities the nine largest mines new

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

our and customers. XX% supply pigment our X,XXX internal at needs million capacity consistent of approximately integrated capacity Vertically feedstock and this well-balanced $X.X for approximately Our full of our business model ensures supplies secure of base tons globally. effective customers supports

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

global focused quality, sustainable TiOX is strategy advantaged safe, the as tons. to the cost leader Our production on of positioning Tronox low

reduction had carbon our where from Now the let's in a we significant XXXX sustainability accelerated XXXX goal to our report we to increasing the Slide in emission sustainability to the from goal reductions turn in targets take XX% XX% In to performance. previously published relative moment I June, made to released XXXX want strides X, emission our increased XXXX we baseline. we XX% our to reductions XX% and cover

zero waste due with as provide net significant XXXX, and megawatt exposure reduce commitments, This injuries. other dedicated project including the to zero in to well workforce to announced in made was of cost revision the XXXX landfills in Africa. solar increases South possible related largely Group project and our to by Tronox's goal expected our XXX to committed African targeting region. South XX% is as The remain renewable XXXX targets sustainability energy zero we SOLA electricity needs We to the externally by electricity

emissions by quarter expected X And project globally about to locally It's as this positive also the XX%. by our and impact both is the on and be ‘XX. Global have Scope very our expected completed we're lower organization X first it to excited will of

SASB on and standards. TCFD We our in accordance also aligned disclosure with risks added related additional climate to reporting

of standards stakeholders priorities our are internal align working understand our to and We expectations and continuously the accordingly.

earth co-product we last increasing we are including higher Finally, from rare as minerals. streams value highlighted continuously realizing quarter, value

green economy. types see earth to demand in We our in found for of given elements their use continue rare monazite increasing, the reserves the

we rare the mineral more opportunities resources. earth exploring sell content extract what are our of to value We upgrade to from

and began. halves of what was XXXX review to from the it messages X of ended different Now throughout definitely very we Slide the key XXXX. two of for our the year proud turn a we're as XXXX perseverance organization to let's tale

began The Americas. of starting EMEA XXXX by considerable while China, first was the characterized half significant in the by Asia-Pacific, of momentum, followed and half with rest the market pullback second

a XX% XX% These adjusted expenditures. by margin compared our fourth cost year management volume while decline Despite million of a achieve driven the pricing our free strategy. XXXX of on full TiOX year, prudent zircon production decline market were after to to volume million XXXX investing environment adjusted of in able flow EBITDA to mid-XXs, the in quarter while structure $XXX align cash in $XXX $XXX EBITDA generating the results in prior focused year the we remaining million and commercial current capital and were full with

in in million our Project $XXX cash of business in investment in to flow than capital AR reinforce fourth coming and cash the newTRON initiative Despite managed key the cash to ongoing than included more strengthening $XXX our capital receivables. commitment that our mining successfully came in to our The Tronox's increase projects expansion pressures cost these well year position Our headwinds. generated anticipated projects million free model. lower above quarter securitization We the -- expectations. offset of the due lower and in

dividends. returned In the year, shareholders, to $XXX including we share million and approximately repurchases

demand. million the Australia at South the to our more by quarter, be unfavorably on fire market we Africa, in by absorption in namely impacted costs with the As as also quarter. and events, cost unanticipated adjusted historic KZN the flooding side we highlighted the production aligned our We lower negatively in closely were $XX impacted fourth in fourth insight lower the

fourth million charges. absorption $XX total, from in unfavorable costs In over and we quarter events incurred

from quarter, sale new and on see impacts first cost the the of events in of these zircon the expect ore namely tons to mine. continued available We

to first greater recoveries third these However, we expected quarters. the improve into to and move second impacts to begin we are therefore, anticipate EBITDA quarter the as within and

provides X year the full more bit Slide a reference. your for on detail performance

fourth swift contraction by all across in the we'll and X Improvements more by operational let's regions. more offset and lower than review sales detail. pricing increases million impacted $XXX volumes. and of quarter So market turn a were cost Revenue Slide was to

of fourth higher outlined, includes cost approximately and quarter from the market previously cost As to idle along overhead lower fixed costs lower $XX absorption. million and I QX with events charges facility

effective our XX%. XX%, normalized quarter rate tax was Our for while was rate the

Our GAAP diluted $X.XX adjusted per share was share loss and per XX. our $X. was loss diluted

our EBITDA driven adjusted higher in flow was quarter. Adjusted our was cash in the impacted quarter XX.X% free the the operational $XXX million and margin by quarter $XXX million. EBITDA And event in was costs

to Slide X move performance. of commercial our let's Now a for review

pricing reduction quarter. TiOX Pricing within for our see of driven was expectation and guided in the across demand in previously strategy. line did range by we TiOX regions, zircon all a both our across came our in significant execution While our with continued commercial volumes

XX% XX% pricing fourth -- favorable. sequentially, percent the the selling quarter quarter zircon declined volumes FX declined Zircon prices relatively to while flat prior slightly than X%, declined volumes and to while (ph) by impacts were remained from price TiOX compared average of a our half zircon owing less prior to the production lower quarter.

stated of to was in lower driven Revenue prior products by from largely the of TiOX weakening sales. from decrease a already in quarter the translation revenue U.S. other strengthening volumes iron unfavorable million, as euro. the we a quarter and believe year see dollar to impacts the prior beginning saw previously fourth headwind pig the firmly We was XX% of to in the we to The the compared $XX the primarily rebound. to we're due our a year trough

Europe a rebound quarter, to expect in as by from the recover from demand quarter than low, in North pigment still anticipate slower Asia We bit the fourth demand the a continues driven America We remain first lows. although larger to to other regions. quarter increase up fourth and

into coating improving continue season sales regions and in expect we throughout in the as as second demand we We volumes anticipate progressively the the third enter and move all recovery to seeing quarters.

variety our of benefits with the results. quarter anticipate margin Even our quarter support the stability see volume our customers by This in contract significant financial pricing and to relatively TiOX arrangements margin continue to first that also is the our we our level. we to flat fourth stability recent in reductions, driven overall with remain market the the have initiatives the initiatives. We of

pricing we it approach economic we large years. in expect successfully demonstrated has previous commercial the last QX, over implemented communicated to move As in part not in previously as we've and Owing several transitions. do to the

over the JF a turn our JF? now to call of performance. for I'll operational review

Jean-Francois Turgeon

you, Thank John, and good morning.

to Turning XX. Slide

decline favorable offset. driven Our and rate by adjusted was including lower EBITDA unfavorable a costs, were sequential impact. volume, pricing freight higher FX sales

of significantly Africa an and As flooding impacted the in facility John in delayed Campaspe which at the our South Australia, quarter was KZN Atlas by our fire outlined, historic mine. commissioning a

this back be month this from site are end at we by the damage we will level to and replacing spiral Africa, the South month. XXX% In the of that the fire suffered production final

for a lower quarter result, available be will also absorption. first sales zircon As our and lower by the fixed impacted cost the

and In successfully abate being is heavy alternate higher at reach our due We Australia, result and this heavy where never is Where seen year, were a while the flooding to able the level located area to last in collect late water mine in the in the continued rain basin. is road, team, an mineral an negotiation old a now month important site to by at significant before trucked albeit the this being Atlas the effort milestone concentrate Campaspe produced using cost. off millennium.

use the the given accomplishment roadway. the flood significant of to original good our inability on A impact

We bottom about mine bring improvement the are line. to our enthusiastic value operation will the our this to and

utilizing see the from will feedstock. We

second form ore it our zircon to to the through time this for see ore through will We the take begin flow in All plant. be the further sale. in of pigment benefit result delay incremental the as for cost will will quarter our

half million. We see move events by the impact the benefit more into In second as our we these result expect $XX total, significant year. a to of

the we charge. absorption to with of in our a $XX market million closely resulting resulting also As lower additional of cost in million, demand fixed communicated, idle quarter approximately impact the facility we This LCM an quarter, impacted total and $XX fourth the align lower fourth previously and slowed more by to production result in EBITDA.

these continued from first for on impact of in cost on the events available mine. new namely see the the and to ore zircon expect ton sales quarter, We from

range outlined of from the fourth be the in remain to quarter result dynamic commercial $XXX high-teens. margin hangover $XXX million in to previously effect EBITDA million the EBITDA the adjusted the we John event, and a XXXX quarter to first adjusted As and the expect of

Australian to production into a improve quarter within first The begin ore impact move expected EBITDA cost to anticipate recovery we quarter. second therefore the the to and third and we is as to zircon and our greater

Slide to XX. Turning

for plan action a forecasting employ swiftly robust for We variety As current and economic process landscape and with that enterprise we react a a enable model, us optimize success. review the to to of our we Tronox navigate our optimization the taking backdrop, to as are a macroeconomic portfolio. our of are result part of Combined scenario. position able

cost to are have optimize a scenario to be on number that a on. and levers continue We of variety focused reduction we performance of laser across executing

reduction have on We begun executing our playbook. already cost

have implemented hiring freeze. We a

fee, reducing costs. and We travel discretionary professional are other

We additional are costs also optimizing our driving initiative. chain supply fixed and

working was of this third of are level replenishment in Declining increased the demand XXXX. safety inventory quarter. our managing and We half prudently level capital. which first benefit below seasonal of in enabling has fourth been norm the drove stock, TiOX the One

TiOX costs of be an while fixed XX% This asset, feedstock led optimizing relative absorb is to our part our producer to fluctuation have integrated strategy. which us market our target higher TiOX Our asset. long-term vertically

beneficiation a in the feedstock result slightly the of will first action year. second is production result demand, XX% quarter are in lower the higher driven which and As level taking level. year-on-year customer costs down to our we range production This and current by of in mining reduce TiOX

vertical and growth On support capital have profitable previously, key highlighted we project integration our medium expenditure, newTRON are and as long-term to investment initiatives.

plan have adapt environment to below annual significantly million as spend in capital to our the $XXX However, to to it XXXX reduce implemented macroeconomic we be unfold.

scenario consistent with project, actions is from flex decision at free While the recession this these the this and this case. ability these realize will our benefit generate our including do anticipate positive enable appropriate We ability to for believe to to we a across our capital flow of spend. cash is our time delay Tronox variety will business

product customer and will for meet success. balance future We to effectively to Tronox the are ensuring generation continue have we our while needs positioning cash necessary

financial I position. the call Carlson a turn to our review Tim over would to now of like for Tim?

Tim Carlson

Thank you, JF.

XX. the total Turning of to We debt Slide $X.X billion. ended with year

X.X leverage of year net the Our at end the times. was

liquidity, our our and and covenants Our including of equivalents, term as in global which operations. loans on Total $XXX balance maturities well with million $XXX is no term cash financial or sheet bonds. distributed cash remains across million near available significant until was December strong XXXX no XX

million safety and $XXX cash our including due expenditures was for strong $XXX operational was project million Depreciation, million was Capital projects, $XXX and flow for $XX our approximately newTRON, integration and and was totaled maintenance $XXX million in capital, expense for vertical depletion to Atlas cash million Campaspe. totaled free XXXX for $XXX million, the year amortization earnings.

returned in the repurchases. in We owners share form XXXX dividends share million to $XXX of and

more forward look current this As many before last remaining to to have the and your where in just say would future deliver role transformation environment Tronox April over shareholder is is a played from my navigate a to extremely Tronox's call value last on to I'm in years. support years. I retirement six for the earnings proud for I it my the and thank meaningful to well-positioned like you X, today,

turn now will John? strategic very I and John over continue past I'm success. Tronox with Srivisal, first John team he quarter the leadership, years executive that partner the confident vision, to to financial over skills worked brings who several to a the role the and have business on discuss the position the I'll will call closely outlook. as for

John Srivisal

Thank to words. over be excited meeting you, Hello, Tim, here forward this everyone. for looking you the I've morning. of months. those coming been many I'm kind to

Slide opportunities robust of employ our markets, At analysis XX. operations, bottoms-up Turning developing we to Tronox, the a risks forecast. and and in our

seen, the we and TiOX that confident the be While of remains recovery have trough to on we are timing the seen volumes. pace

outlined, quarter the impact operating fourth we and as to JF zircon and of events. the in expect to However, quarter John continue see volumes costs from first

increase first current Based million on TiOX analysis, $XXX this adjusted the in to we that assumes volumes expect quarter. million to for the $XXX bottoms-up This range mid-teens our low sequentially will EBITDA the range. of be in to in

some As pricing of the stability given TiOX John in reset indicated, margin this flat also assumes contracts. relatively our

respect quarter volumes X,XXX production FX, range discussed to rand. to into Furthermore, zircon, at also by approximately from lower we do these reasons two about The in $XX a tons, have production range, the we events, With incorporated to dollar sequentially KZN earlier. expect Australia in by our South driven African a decline owing million due costs. assumes the primarily higher and first Australian for headwind

XXXX. recession recall, the case would from Investor Day back stepping you Now quarter, as at our we introduced June in a

While firm that stand supporting are behind factors to since the time range, there then. we important analysis three consider in the

to Investor First, starting we months months from modeled the correction our Day. XX market XX

downturn the to of we Instead, achieved Day. We assumed benefits of which by anticipated. hadn't previously Investor of originally we the we had XXXX. the of saw Instead, fully project now we realized of have newTRON savings end also therefore start days aspects the reduce a within capital, delays delayed XX the realization

volumes XXXX, XX% declined while the flooding third, TiOX mining case Australia a Campaspe historical And the year-over-year decline. the Second, XX% assumes benefits delayed recession significantly from Atlas in project. has the in

QX TiOX anticipate the full slightly we be year XXXX to increase sequentially we up to trough, volumes from flat While to expect volumes XXXX. from

out have we dynamics pricing anticipated. however, as played Importantly, exactly

we several the team As the have emphasized over the our have market. years, programs put in has successfully the in stability commercial reduced volatility last place

than higher working to $XXX Moving approximately to we expect use, million cash be. which our where XXXX for to expectations it like is capital be uses, we'd

expected are outflows to further working through these efforts. We reduce optimization

net be than We $XX of $XXXmillion. $XXX to cash expenditures interest million cash approximately and of capital expect approximately taxes million, expense less

currently the taking earlier actions a shared business. are as JF we

assess and liquidity to alignment cost to can to delivering ensure sufficient economic We the on backdrop. commitments. of execute our on the and depending remain focused production we and continued against continue will our economic pull We scenarios levers the on

With That concludes our for remarks. like prepared call the questions. that, over I'd to turn

Operator

from Thank Instructions] we from you. Goldman [Operator lines have The comes phone Sachs. first of Duffy question Fischer the

is Please Your Duffy. line ahead. now open, go

Duffy Fischer

Yes. morning. Good

Can from buckets trough trough those case? you do question, your your First the differential about the to just last case. roughly what quantify comments would on three

John Romano

to And good talk you Duffy. again. Sure, to

Investor buckets that presented of So as separately, we we shared $XXX focused if per well, newTRON as those to you $XXX And expected third savings. we to volumes. related at take savings. three And a on of Day, as ton first we about about

expect come So those market don't see we XXXX. given until later market picks savings this the to environment, in through up

that cost of of portion to related globe. a Additionally, full which savings, the integration required ERP across our

So a related while. a we portion won't of to that amount for those see that

initially Atlas. the mentioned we as you relate Atlas, we'd we -- to to had from see expect and about that of Turning $XX the we about million assumed benefit before,

delay up, the However, additional in in as opening the see market, the through. can downturn costs some given just given coming the you do expect, we mine

So try cost to hitting. bring activities to that and floods, for additional that that we're the with the see we'll ore doing accommodate to

roughly $XX that's So million. about

I And we're that. XX% then and assume recession finally, case than mentioned, as volume declines seeing more

Duffy Fischer

Okay.

Jean-Francois Turgeon

an is as element. that cost there zircon getting year well. on the it's we're that in volume not early And and It's the

Duffy Fischer

sheet just a over year calling as now year, your big question, kind and to capital Okay. flattish. kind And million but balance were yet down volumes up guiding volumes then working being coming you're of was $XXX you're million another up this $XXX of inventory last

that? is we need much did year working ago? Why more it a do capital So what than we so

John Romano

building inventory. Duffy, we're still

much as We at brought the TiOX have sites, down. not our have production down volume but as come on

feedstock. Additionally, we are building

in a So big the the level. portion inventory build that's of

Jean-Francois Turgeon

demand of same realize in we're QX, versus that QX Duffy, integrated. saw a ago mean the you and and we're And in (ph) year expecting that drop quarter. would in in order TiOX XX% drop I we XX% a vertically the

high are those So we operations. and have our mine down fixed to smelter and slow

down So too slow we them don't much. want to

at see would if second the us well up. position that why building obviously, inventory market half, we're Look, the we that's picking very still for So the moment.

Tim Carlson

Tim. It's Duffy. Hey,

The other will working receivables. year-on-year the QX a in continuing at is slightly cause of of the well. uptick was QX. DSOs the we've XXXX, through just seen as never We before. inventory trough QX component in the probably an more capital levels improved component see obviously for uptick see significant and QX, levels so increase We

Duffy Fischer

Great. Thank you, guys.

Operator

Thank you.

comes next when Please UBS. Josh the Josh. from ahead, you of ready, line Our of are go Spector question

James Cannon

is little little less a that This your ask a mid-teens seems or was upward Hi, guys. gives optimistic for that you Josh. on a going versus whether improvement was recovery seen about in I quarter to James to XQ far (ph) It outlook. more comment just competitor could bit further confidence in to optimistic. was pickup and that the wondering, you've I just what you on if that you're so come? Cannon expecting

John Romano

Yeah, James.

bit I of There's was we're an in tell call on market, picking thought we're mentioned increase Europe market. quarter, seeing world, quicker as made And a fact, seeing fourth seeing the in all in an trough. but we look, it now. around the you in America. regions. the in We Asia. we're So we North than actually reference up to picking our the in in what lot right the volumes was that what is optimism increase We're the or prior a quarter rest the mean, can a going seeing And we little India of up in be going are

and bigger business. of portion is lot this on part investors than business India particular a there. going think China big think China significant our there's growth our is is a -- big part a of a our India is stage of I at

volumes where when we going confident we're those quarter, compared pigment continue. in that think the picking fourth that referenced So margins up why to were where we are we about that's to today are are we

was flat. were going we where referenced referenced be on pricing. also the pricing We to relatively We that

have offset side that have on We some adjusted margin decreases. to stability have agreements lot of actually the and allowed a overcome of the probably us that

happened. flat, So relatively that what flat net-net when we be slightly to think of could depending up on

volumes we're is seeing second quarter that quarter going build build increase. see the to the in to to into we're first So confident expect in and first what because to continue we quarter

Jean-Francois Turgeon

for XX% an of And QX, with customer is what that, than volume what I to volume improvement, far the John but our drop drop was in add normal from is still obviously and way QX of said, are more would with experiencing. James, and our as what we that this expect

sustaining we So to it of was that have the type drop in see not QX.

James Cannon

it. guys. Got Thanks

Operator

go you're We ahead, Begleiter have ready. Thank when now Deutsche you. David of Bank. Please

David Begleiter

Thank Good you. morning.

market on loss does the what the reacting volumes of you how the zircon, does for to pricing that think year? do your and mean Just for full

John Romano

referenced I'd our we into see, and say, our from -- in the stable anticipate talked the -- and fourth for was moving pricing we quarter quarter we volume pricing as fourth flat to call, the Well, first quarter. --

bit inventory and China didn't know, that on with say back of there was So being as begin decrease pull inventory. in short Campaspe demand. a a It the on us would to continued you to I because Atlas delay our we down, impact were with

thinking what's could had move to of have first quarter So would production, believe we X,XXX we're when in XX,XXX quarter today. the about still flat have that at in And Atlas, start we have same and to happening would the we placed first confident tons and we more pricing that we we're impact going the those price. had remains that if we into relatively as that second the see where to we into the about as are

David Begleiter

And just and in Very ‘XX even they'll you ‘XX, now? in on newTRON, what actual good. do think be all the ‘XX savings

Tim Carlson

benefit the automation start our control advanced practice 'XX. elements, continuous of XXXX So we're will in show because another of in our say, by, probably million will million about improvement were development those done investments process on and that in we maintenance I'd $XX our 'XX David, newTRON, some and and increase maintain plant about the talked of through slightly going all of obviously an Remember, to we for of to XXXX and $XX it and

have mentioned, worldwide. ERP we John deployment paused As the

picks be at of us, bit, that available the will additional up. market ton that related the the to a the worth slow part newTRON down project. will And it benefits when all So giving obviously,

in are. that's So where we nutshell a

David Begleiter

Thank Very you. good.

Operator

now Fermium Research. Thank Frank you, Mitsch, We David. have

Your now open. is line

Frank Mitsch

It you, was response sure. the about of was your Tim. wishes talked zircon. and with in pleasure retirement, on you one and working profits a earlier, from Thank you revenues John, asked to best lost for questions that

And impact negative but impact it XQ, XQ fire a as mentioned flood like question, you had that. XQ? higher your of us the in be and On million so from $XX kind million in begs a you impact the the the XQ. $XX slide, in through of into might be what you might sounds than kind what Can the and lingers impacts to step here

John Romano

Yeah, Frank.

So about again, -- start with right when let's think now. in we Atlas what's happening

actually Hill Atlas So and up Atlas, the The And issue. [indiscernible], to Broken we mineral and that to Broken when road pull that's pull go flooded. has Hill still is the out is heavy when running. to concentrate we it of

have now come his Broken Hill via that from yet. shipping in we're route hasn't Jeff Atlas comments, existed. an repaired We The mentioned as up, HMC alternate road to primary been

getting So there. are we material

big in to coming benefit what's that of quarter, the first get second into from impact was more see as wasn't start we'll But we quarter that fourth in out the the Hill running. Broken the really asset. And and quarter

fixed costs had there. You

had continue to to our come run that pigment. which through that we was ilmenite so we We we have to also can that Broken in mine to supposed produce Hills so run continue ilmenite down, can Ginkgo

move the where quarter that about be see actually, said, half would of the cost additional capacity, back ship year to we compounding we'll variety are into cost are we as our QX to expect start as again. full to we through are as are primary of there our a improve from the the we roads that have the now happened fourth get as in and continuing we able we that expectations, in effects think to on that latter to road production roll flood So when into

Jean-Francois Turgeon

necessary. road and Yeah. as for county why will to road mine high mine for and that working hard help obviously do this that obviously the the reach And that authority know as would local soon happen with it could from even production them with what that's the to us close the to year. we us road was that's whole is what's open. We're the for unknown we because predict when and reopen Frank, try full year big don't the we But will cost that

Frank Mitsch

Understood.

about zircon that it material not that think So the costs, production about that? think XQ? then tons, as Is the profitability million way should another we not talking in spills in so that how loss is but you're the lost well? into some XQ just we $XX And the probably of

John Romano

mentioned, Africa on Yeah. South fire. about It's $XX that's because repeat and not million month is $XX and zircon, of on on going which coming as Africa, $XX end to million the online million the this Atlas JF South is back at from

Frank Mitsch

downstream? in that you a would a are judge, inventory Is Got that Great. the downstream, then regarding just volumes. to And average so probably of potential TiOX see ‘XX volumes you. your being say customer expectation there trying are that question with a we in All downstream I'm line? right. recession levels your below levels ‘XX ‘XX or below the case or just perhaps inventory in benefit probably And is terms restocking

John Romano

a drag quarter we talked of the That's is reality when in destocking going was on. that question. on And there's Clearly, the fourth demand. the lot great effect been a from a

I So had a see order destocking of to right. believe than quicker our the we're customers’ think stopped because bit the majority We exactly before. you're starting has they

seen significant you move from in -- customers the a we've month of February, -- up. have In as So volume a we I mean China example. to as when China January January, from great starts we requests is -- to pick

get maybe is upside up was order where the year. we exported absorbing some into there believe subsidies. the restocking be in of in significant in see back was that do the get believe form of money the before year of So restocking opportunity It out you'll an half years to the China two of where what of a additional that And system COVID coming ago being additional we were I back the for it the to we the do into end the won't that year in start happen from it. was there's as it as could to of had growth. But as and all we benefit

Frank Mitsch

Thanks so much.

Operator

now We Markets. when you. ready. have you're ahead Thank John BMO McNulty with Please Capital go

John McNulty

Yeah. question. for Thanks my taking

to spike, guess kind had world can rest costs? a huge the XXXX mixed. energy of speak I was Europe obviously, So of you

the be guys versus you us hedges kind were somewhat in’XX because can think I thinking about down. we ‘XX energy will that? about guess back of plunged immune impact to overall? energy You how to you that should help How now

Tim Carlson

John. It's energy that incremental Tim. cost in our result that for bit plan be a a of nowhere ‘XX in Hey, neutral saw we built ‘XX, into sub-$XX of or it overall versus but near of ‘XX ‘XX, that we in the have million. some we've standpoint, as level will From increases concerns Europe, little an somewhat us,

John McNulty

Got it.

clarify I'm Okay. by to little And confused earlier the bit admittedly, because some just questions. a of then maybe

regard going be or to million in some then flat? you kind the to your speak and there's And be quarter, or guys top to fourth quarter, I In I the you perspective, have move ability about the like, the will guess going more zircon mine mine, and sales guess quarter, with to around that, it relative $XX a up volumes, down your fourth of can you on to So zircon. hit. zircon of like to issue $XX first -- the a issues sounds fourth quarter, that hit. a from had faced in million cost you're

John Romano

normally fact about QX the had. incremental pieces that, if quarter in been rate, as have There's take if the John, Atlas fact would to that in our of there's we in So it million to not XX,XXX about that we zircon fire. run $XX cost we different of not had did had have have Atlas online KZN in and sales would tons of the relates

to quarter. on as that addition In guide XX% again that given in part the down you as remarks, Jeff that, are of in year-on-year his And just see QX we volumes. volumes we the mentioned prepared fourth gave

of little bit, mines which QX that's to our we you're of an XX%, because over are bit integration, $XX And we've a we but of part our slow a when vertical when down million additional we as you're XX%, doing and benefits unfavorable struggle absorption. target got down XX%, down

really it's guide. three impacting are our So in pieces that QX those QX

John Srivisal

in just up. question about and down the from But when of primary quarter from going we the we alternate starts talk It's ‘XX be were the we about mean, though, from on been the road so fourth where mean using would the that it I to zircon X-ish road, had take the not capability volume that this then to road first move the that road. quarter to Broken Atlas to I is have Hill.

when So won't until we've switch mid-year the And Atlas road ultimately, get to from in up volume more we MAGs capacity to material and smaller convert have on that approval of a Broken into running. full and non-MAGs. is road got that use going probably primary that to Hill to we back

levels third So you see that's the to limiting into those effect. you And would to get numbers back when be. up then normal start what quarter, zircon move

John Romano

QX on at the X,XXX to mentioned we're look earlier call, down QX to be you from tons quarter-over-quarter specifically, as going zircon. John, if I

John McNulty

Got it.

off. clear very thanks much. That to helps No, it Okay. definitely

Operator

JPMorgan. now of you. Jeff. go Zekauskas have We ahead Jeff are Please when ready, Thank you

Jeff Zekauskas

Thanks much. very

volumes you and additives. differences? plastic and from dioxide group Europe, titanium How XX%. Can changes? and If paper coatings changes overlay you into it the you Your Asia, what the were And relative then demand those did America regional can work? talk about were down demand if

John Romano

Yeah.

Asia-Pacific. Europe in So quarter, fourth down the more was than significantly

Africa then And had it not second but America, Asia-Pacific Middle down. guess still I'd moved was the market. down, as I to and North down much, Europe, say, East was

about think wouldn't the of was a there in a there coating on bit pullback laminate was Europe down that we Maybe segments, in push there when was the than side either I the a into paper So more say significant direction. how side. breaks on

we that was pretty But destocking in going It the wasn't all coatings. a heavily quarter on saw in consistent around weighted market the segments. effect fourth

us mean, look -- in that obviously, I it's picking Now, North up weighted we that growing as is I is America, into mentioned at QX QX, heavily although, coatings. than on stronger QX it's slower,

anticipating quarter, to that's those pick in the to coating start volumes second So that why every back get significantly into region. up see we'll picking in up we we're as see we're we season, volumes going referenced and

Jeff Zekauskas

of market little picking And was a up of frame magnitude or degree America, quarter? just you order you of XX% it in a contraction that in share Can volume North in or the bit are XX% X%? Europe XX% current or

John Romano

Yeah.

seeing Europe, a some in clearly, seeing the I market volume increase. To fourth competitors more -- but are quarter. previously, we difficulty that are And made we're production are. JF offline. other than there the So from say, significant we previously, out having There's we're mean, hard a still increase there's it's we share in significant point there that not some gains, where to are were

by that market So being long but be the that it's by driven are we price. share It's term. there have maybe some customer more driven some of could not agreements gain,

Jean-Francois Turgeon

And use I'd Jeff, our maintaining And integrated impact I'd our environment with story that and that's say, operate the way and reputation pigment helping certainly on our sustainable is our we obviously us being we that our say, to vertically and plant customer advantage. approach the share. mine and positive our a gaining

Specifically, against Chinese competition.

Jeff Zekauskas

in in North what volumes quarter, American fourth the like And TiOX? were

John Romano

looking because a more. getting North we're down saw of picking much quarter, into the down quarter, seen up fourth XX% And see kind to into we're the so we we're probably in than we indication and regions. we the through I'd moving look second say probably X% first American again we Europe have was the as all would improve in quarter to slow downturn. to bit is America what as and Asia already previously. not up, halfway move last as customers as about the one forecast the And And would we an normally North that's but they're from and volumes, quarter more

Jeff Zekauskas

Thank Okay. so much. you

Operator

Global. now you, Please Hassan you're Thank We from Ahmed Alembic Jeff. have go ahead ready. when

Hassan Ahmed

Good you're from, morning, earlier. say, of you let's million million EBITDA you earnings I I backing given a the guidance had it JF. billion the sort $X your have if of commentary, guys I'm look power mean, confused of But away still my in the QX $XXX from take $XXX stems to to about million $XXX given. confusion guidance at of kind of John from of sort trough and seems company. the sort little a

$XX annualized a number, the million that, take If $XXX $XXX an the million to annualized million I that's to guys QX obviously $XXX basis, that million talked $XXX that’s you $X right? and your then had about. and factoring On billion one-offs $XXX of look million at million and

we terms that of where potential. So earnings cross of now in sort are

John Romano

just like when question. consensus we in look so where the about is to So -- pick million. middle million out there think $XXX at million -- the between $XXX Look, so you let's of the guidance, are thanks our for on $XXX million, and $XXX

that Australia say $XX the attached $XX that million to $X the been million million million, that of to the had and zircon million is And $XX South probably attached $XX $XX to is to that's of cost have So from to additional about we'd would attached bridge, we that million of sales attached of is and EBITDA that Africa. mine. other

consensus. least be where to to would that So we that you at bridges get would

multiplied take we've and below. guidance you we third to can't, that we quarter, because four thinking is into want don't that provided the start When the said, well and about as always you by moving second again, you

into I to you could think be. made how reference some bridge we John where would

about John $XX what there's said by additional costs. Atlas on We itself. said think million some You

talked value we're it for have So a because being $XX million year not getting would that historically the that million just coming from $XX we about where Atlas positive. we

you in into year, multiplied the if took within you second hopefully want I that -- more color. I'll quarter that a margins but to if be, the comment, anticipating make are just get by say that be don't provides a of know, numbers third numbers going looking you'd the bit case. we're them to we at four, little that if that and our recession the half As are you our JF, if

Jean-Francois Turgeon

No, Atlas I that we I right be At value obviously there's Campaspe way. our was not. Investor assume Atlas operation recession case that in Hassan, will and from hope absolutely it's QX. that at the think was moment, no understand the when Day, did you full in we Atlas

a we mine there associated because with run we fact, In down. should continue to is at have that costs the shut Atlas moment

we more So have less costs value. and

and the are the So our the to do, QX the go good normal below even know our and can what We progress, we don't that's And very market. that customer pigment demand. a feedstock run. above hope explained but position to we'll year that. market we have would look why in the to as recession We'll react QX be meet

John Romano

came recession not more earlier, just to days we're later, XX anticipating that that out of And we case see one it's a recession follow-on. hit. what we John when maybe Again, with start that repeat said we'd case,

now by So starting a JF said. from just lower we're point exacerbated what

take believe the still a going in to of case, noted. to we that So that just time bit recover recession just little it's to points due

Hassan Ahmed

obviously, your change, in $X.XX flow QX, despite sort generation $X.XX price right? million a is around all you are flow thinking is like, of, and I of of just in that to share, $XXX case free free and and I right? which about and call And Understood. it carrying the modeling how guys sort mean, share pertains mean, it generation, cash as sort of cash the it, forward in annualized in the it like, headwinds with recession $XX

of of how -- me, you just I'm buybacks I that if trying guys to bought of X.X the with cash you QX. numbers how So company about the my free ability mean, and parlay you flow thinking just because million are guys shares reconcile right? sort back in generation share

John Romano

the buy We back quarter. didn't fourth shares any in

So that. I'm into backed not you sure how

Hassan Ahmed

it QX? I'm logged where the QX relative that was Say in count have you in at to what share looking just guys again?

Tim Carlson

we obviously are coming back in and average but buy quarter. The did a average Yeah. of by shares QX, shares weighted that's calculation million $XX down because are weighted QX

Hassan Ahmed

free on guys strong thinking about a shares you with go have? basis, particularly the And how cash back buying we are forward

Jean-Francois Turgeon

even plant that playing continue mean strong mine, mentioned, playing from the we'll seeing as in moment, capital down At been us demand has some as if drop and be that's pigment as fast case Hassan the the slowing what it in was in against in specifically, we're well, the expect market. so demand. case. John us it slowing QX our our will So we that QX because the to against still not the And on evaluate working we're I are is we based

working is year will down pay the plan though, and with of trying a we're our of should debt opportunistic see an obviously And on we that share. evaluate reverse the cash the use dividend or if to buy maintain we if improve flow half for should to to of obviously XXXX. second back basis, that the we and use capital that In should and help free

know, I buy the And John, free million approved to that of you share. approach still to the still $XXX using cash flow. are board and committed have back we As by

Hassan Ahmed

Thank you. Very helpful guys.

Operator

Hassan. Leithead you, from now Thank whenever ready. We Please question have Mike Barclays. you're the next go of ahead,

Michael Leithead

morning, Good Great. Thanks. guys.

working just around question First capital.

was square plus think that, in I came of potentially being hit lot so XQ quarter quarter. kind like looks you obviously of last fourth what for pieces moving unfolded? than it talked million the can it just It $XXX delta the kind a XXXX. lot in about a There's a of better you as

John Srivisal

QX. it a to as our Yeah. pieces relates There of activities number Mike are in

securitized is, of we out receivables Australia. pieces the our of One

DPO did bit year. of also our we've significantly DSOs a terms credit we in days our some of work had in at end that what cash, did managing other a bit They of the collected quite in more we also job and a collections had and a deposits previously. below reducing of team terms got couple And of of out We of and great receivables the quite outstanding.

Michael Leithead

cash And different angle. a but of I balance come from to just and secondly, back wanted Makes it. Got maybe to sense. sheet, then kind flow

'XX. and XQ second probably ticks the up I think bit record quarter trailing our a in I about X guess, times be XQ, leverage after you'll it from

through laid $XX about of You costs dividends $XXX about out million cash million.

paydown be XXX. cash kind above EBITDA go end you back beyond cash a to of Do Speakers] to guess the And I that you Great. should to above. excess or [indiscernible] how about think cash flow you then debt be from flow? operating flow think excess EBITDA think it's of to going asking year able And will [Multiple way should you're full then dividend that? fund

John Romano

as as or cash paydown depending excess debt flow look the we at that move So buybacks upon -- we share through year. opportunistically between will

So with we said continue be consistent what previously. to

Michael Leithead

you, Thank guys. Great.

Operator

now you. ready DeYoe We have Matthew. ahead America. Matthew you're when go Please Thank Bank of of

Matthew DeYoe

to necessarily deflation like all. if cost needed -- worried to by in because some we lower isn't of just are capacity rampifications online to back capacity see a energy some restart big you your comes starting across competitors? morning, a of little some Europe, bit Good in there? side that of worried perhaps the cost Are Where of does Europe is hit on idled just you that market. price but So the I'm kind about ramp the

John Romano

yet There or anticipate energy make also that's that let I'll to capacity the costs. down to the online. that be due abate been even energy slowed capacity did and whether in quarter to quarter a come goes -- that. a as but Yeah. we'd not high over see back down comment we wasn't that's seen, third in lot and started time, a I'll there's capacity fourth been that bit Tim of do so Look, actually

is, issue an an be don't we answer it short the that to before say I'd expect So wasn't issue.

demand to expect We start up. back to pick

up. China China would generically our expect picking going being up, brought be that and we from strong saw continue but by some as had that that's As some to mentioned, of China pricing was talked we're country. of increase China were again, the fourth into offset of stay significant moving of that and quarter in expect and in Europe, as previously, the China, the Pricing China that's We to strong out a a not coming $XXX about we We exports Europe, is would seeing in to exports up increase been to we China in move there it's in recovery now from about with would some economy Europe expect volume we online of into on pricing. we

to know, Tim, if So I comment. want you a make don’t

Tim Carlson

XXXX. down make We Matthew The to of see I'd in was XX%. Energy like that XX% energy. our about to coming cost to other product comment as it of that relates

bit not they're It lot. UK relative facility, are X% depending some little modeling the do ranges do benefits, significant saw but UK. So Yes, significant have we in that to our to moderation, the the costs on a we highest but in XX% we obviously and a of 'XX facility. not of our from the When increases 'XX.

prices us. to we've per that we competitive market have for on ton the cost in that be believe any of fall of there pressure Some potential modeling done to terms significantly, energy

Matthew DeYoe

to helpful. rhetoric Atlas I overall inflation All for the know, year. that number That's think And I last astronomical guess you it again. was normal are do if $XX Is But we? XXXX, this for million, just year? old obviously, But, so right. I cost bogey $XX were million about think the was then, is what $XX you got million, years, coming think where in from you've

Jean-Francois Turgeon

is we'll Look, Matthew, kind see flat obviously, more of to what XXXX.

that's going For what we're XXXX, we moment. not at would obviously have to liked the see it experiencing down but

cause a more of to increase million right. ‘XX I two you of And we I there I if is absolutely ‘XX. more You're what position a we're XXXX, remember, mean, as ‘XX than those But for expecting way in years. go a mean, what the $XXX was jump flat from to saw in huge we mean, had 'XX. to all

John Romano

third that move expect, the raws, see likely first, quarter, start to as the and on we'll fourth second more not seeing move would we And much in but quarter.

and cost includes So attached what's fixed happening to some that think in I cost flat additional Australia. number absorption

us So in ‘XX. additional flattish we areas, that kind is, about down some what's of that number and for that on but costs to average talked other it's flat, getting

Matthew DeYoe

Thank you for that.

Operator

Suisse. Thank have of with are you. you ahead ready. Roberts John Credit We now go Please

John Roberts

best and Tim. wishes, you, Thank

some China recovery post sense is us are orders and mentioned You where ago? services year a whether up. will the Could debate primarily New a China give you the Year not versus recovery be materials. a picking There's about Lunar

Tim Carlson

Yeah.

get say what and the because good we a XX% maybe would quarter. were on March, in we're And in see would what XX%, were down we where Lunar I from seen in to into point starting up it's numbers fourth in probably So January. January, lower have those volumes February prior as New Year XX% our China, they than

So starting that we're to recovery. see

now, that not, up. Good to moving that is question quarter starting is and price right We our third on service up. on starting move in seeing would Pricing increases a or from market expect in there's whether opinion but based or see not China. China demand the is we're to we'll in pick the what China industry into continue that's to

a have good large plant It's we remember, And have facility, there. not a on but we handle what's a happening.

industry, service juries is of on move demand QX of in QX the normal I seeing reflected -- us think So which more but helping in still as to we forecast is about hopes. through to much we that back talked it’s get how a part that and as out being pickup that are we

John Roberts

in there kept And you then about on China's that past decades. exploring that the world's worried been your rare earth opportunity? initiative, dominance for Was something the from

Jean-Francois Turgeon

And material that's be in where without the coming because look, world and the the Australia years government, is, China say are about would in South mine what go at the at for interest we moment fact now. moment. China, stockpiling John, material that upgraded obviously there's worry that to the I interest create from I is is could having Africa, us. that our a situated to Because opportunity for think are and few the

look, So nice have and selling have reserve it. we accumulate we're of a material we this,

if and And the doing And that. if some if developing think want concentrate create be, it's rare real to is our and into of moving fast for we're are and a as that business. we some existing the it plan investor out out And But we tests of value earth. monazite we're value this really concentrate we at our pace. nice and work that lab getting revenue into John and upgrading mentioned, some a doing with we we're would you fit that tailing monazite

John Romano

by out to monazite is, Chinese those $XX manipulating get been now is there, reality And the years. to we've for price. us. be or that's capable like streams interest controlling of us value. had there's of earths a tailings point, going going And more more actually streams which JF's $XX very into Those to rare million to million worth XXXX investment rare I been lot for the are selling be to the are the for allowing more earth guess

what uptick significant we do a and a natural extension our currently see It's of there's we with it's upside. So that mines.

that the to what going obviously that get bit. So And continue in up I of interest to to mentioned as maybe some to we're that say will us governments be. opportunity on there's speed some a trying JF help evaluate will

Jean-Francois Turgeon

And that still it's not Yeah. clear monazite to you you We're value at I we're from adding moment. and really where that's plan. selling And yet, John, that's hope monazite when start concentrating tailings when move earth. the to from but rare to the tailing anything move you

John Roberts

you. Thank

Operator

line now Andrews Morgan of Thank you. of Stanley. next the have We question from Vincent

now line is Your open.

may You proceed.

Will Tang

question taking guys. Thanks Vincent. for This Tang on is Hey, here. for Will my

chlorine a go of could one specifically wondering outside guess expectations around kind for talked briefly. feedstock about you Just around of your TiOX and you But quick your I into for more I'm guys if that detail I cost? more materials me. raw know

John Romano

something chlorine that We chlorine generically on just I'll say uptick at time expect seen from year. North pullback that's cost spotlighted. be haven't touch on the lot someone that in this clearly prior spend because America I'll at so stage. on. don't is Look, that cost we Chlorine least we a particular of Yeah. to a a seems significant

last to to opportunities consume benefit we try regards America world, that usage that in the we with And have years. rest how get look but how regards the to the we've to we inflation chlorine, of the chlorine it's we it to could maximize one is In we continue two the impact, the impact biggest the use has that at from an and with that. seen take that North

Tim Carlson

just increases for Significant we're in million ‘XX the million tune John. expecting what $XX a the on, couple of to XXXX spot single-digit and in of That's is year.

Will Tang

you, it. Thank guys. Got

Operator

Thank you.

of Roger. America. with go are phone from question Spitz ahead, ready, the comes final from Our you Roger Please line Bank when

Roger Spitz

In entered few $XXX looks $XX you'd million and from I U.S. quarter's minutes them you receivables a These March like derecognize you million sheet. million entered XXXX, you ARR a It your those said balance On receivables. and calls, ago, look $XX were which receivables. solely, just Australian sold you securitization securitization facility. last AR guess, like

So these the I question is, good have two are facilities. different

So presumably you -- December and as of the XX. $XXX million you've sold

U.S. million understanding and of then of correct? in have sold receivables got at derecognized Do the year, and Australian sold receivables. you've $XXX derecognized million the $XX So end I that

Tim Carlson

do in year. facilities expect end be those of drop-off of to XXXX. in recover just Close available and is facility total a as sales of The the are sales they the continue should of recover and is Roger, let the $XXX in $XX of you in utilized U.S. significant but know as due destocking. so lengths, to million, $XXX million the but significant the before separate chunk Because that facilities. of two they only we million. to themselves, facilities a end Facility QX to had We that Australia $XXX QX, are million, the QX

Roger Spitz

Got it.

understood, the at and combined derecognized the year to sheet sold XX? just as $XXX was I of So balance make the end from million of facilities of December sure

Tim Carlson

of as revenues Correct, availability million with $XXX the recover. total

Roger Spitz

Right. very much. you Thank

Tim Carlson

Thank you, Roger.

Operator

Thank you.

We have further queue. no questions the in

So Mr. I'd call remarks. back Turgeon some like to to the turn for closing

Jean-Francois Turgeon

and everyone for call you, joining thank thank you Brica, the today.

cash including across our That free term and everyone listening. great conclude with continue prudently long As we project and ton a accordingly, will to focus and our generate for costs sustainability without and call thank Tronox per capital flow the scenario. benefit losing we day. the on Have you to of a sight customer reduce enter key relentless safety, manage any economic align production maintain into reducing cost XXXX, demand

Operator

Please joining. Thank That now line. day, disconnect today's have you all lovely a for call. your does and you may conclude

Tronox (TROX) 16 Feb 232022 Q4 Earnings call transcript