Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Tronox Holdings First Quarter 2023 Earnings Call and Webcast. My name is Brika, and I will be your event specialist running today's call. All lines have been placed on mute to prevent any background noise. And after the speakers’ remarks, we will conduct a question-and-answer session. [Operator Instructions] Thank you.

the and over and Head to today's turn Chief Jennifer Financial now begin Officer Sustainability of call. will conference to call Guenther, Planning I Investor Relations

when are ahead go please Jennifer, ready. So you

Jennifer Guenther

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

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

move through We today's will as be using we slides call.

website can access the investor.tronox.com. You our at on presentation

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

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

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

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

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

John Romano

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

to We're world's TiOX nine and may summary facilities six Tronox start pigment like five integrated for call brief story. producer six anyone the who the newer a bit plants, to continents. be on vertically across with mines today a with upgrading largest little I'd our

space Asia fairly are well-balanced X.X and our capacity approximately and tons Pacific, East Our X,XXX Americas, Africa supports globally. across of Middle our pigment of customers evenly million the and Europe, sales distributed

effective full needs ensures and of about customers. capacity secure our consistent internal our integrated supply at vertically XX% business model supplies for and Our feedstock this

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

Tronox Our production strategy TiOX of on advantaged is sustainable global focused leaders as low-cost through the safe positioning tons. quality the

the first slide let's range TiOX prices the trough now guided turn on TiOX In to Sequentially, guided we lower the fourth improved the volumes quarter XX% from despite year-over-year. call. from XX% fourth previously X. predicted or the we levels to fourth improved recovery selling our prior within volumes saw X% quarter, or X% our quarter average quarter year earnings So compared and

to is And last our have emphasized previously demonstration top high we of anticipated. our of the a first investors As the over few teens a adjusted quarter our million. by range we guided our transform and $XX exceeding delivered we We margins performance delivered adjusted end EBITDA that. we above continued $XXX EBITDA million of XX.X% years, range the business to of

lower management on and cost team our focus we favorable rand of outperformance to anticipated. what due quarter Australian factors dollar, quarter spend of and cost and Our up to including inventory prudent this exchange the continues proud South we the step despite challenges to relative was face African continued mainly in versus and We're our assumptions the macroeconomic the the and deliver. team's rates discretionary the sale several

in or in quarter following a by we provide happy impacts at Africa fourth going the quarter the levels KZN rates. We're last from that quarter brief events about to impacted further a fire utilization upgrading forward. full the on will be to back event There to production fourth no spoke KZN second We update are in report operations our that quarter. also South wanted the

and up Additionally, are Australia in running. operations our now also mining Atlas

to haul roads then utilize and able higher-cost We're mid-XXXX. alternative for which towards the continuing primary anticipate material to we're continuing offsite, hauling Until on ship the we utilize to work the roads roads. we occur to with lower primary moving being authorities could will what compared local volumes

in the second Our will the hauling at higher higher elevated to quarter of plants. due consume remain half year and costs second cost we pigment these our the costs as feedstock the in

payable. free driven a including accounts was primarily quarter by cash lower increased Our of improved higher million to inventories flow sales use receivables slag, for a the Jazan $XXX and due accounts

market communicated projected the we with lower while result reduced a pigment not down of levels. trough we since production to QX on rates As levels call, as would our not we demand we bring production earnings our at demand demand, align last did sustain

Additionally, operations the first to quarter purchase use South in with. slag cash than anticipate we Africa flow we the continue the more some remainder generating contract slowed our of cash. year positive offset and of for under free to our We upgrading of

Moving to slide X.

Chief externally work hand-in-hand. towards profitable is area we continue appointed and centralized to believe future focal relentlessly increasingly Jennifer ensure ESG other of a and to communicating our our externally Financial on are Sustainability Officer significant Having Jennifer Head two investors, the sustainable Tronox to sustainability effort our We of of at efforts, approach part greater role as and stakeholders. and becoming to Tronox with lead customers ongoing into the efforts and these Relations sustainability focused a point create will key efforts as conversations insight and an efforts an these Investor provide Guenther around this Planning. align exciting In go our we

I report XXXX. by our wanted XXXX path neutrality that disclosed in highlight also carbon to we'll This reinforce be our publishing previously to Sustainability Report will May.

a X with key we XXXX continued baseline. and intensity more for first Scope by expectations become XXXX XX% XXXX targets excited to time to of by reduce Additionally, about stakeholders. against emissions X% make we're to the fully We're year the the by aligned our each committing progress

but Revenue of XX% of in $XXX for softness. market represented detail. continued review revenues Now million to prior more quarter let's to due move decline the a sequentially slide first due financial improved to a our X% to X improved TiOX year of performance

million. Income from quarter operations million was income $XX in net was $XX the and

XX% tax earnings the and in $XXX adjusted in was share earnings and was was our diluted per share quarter rate guidance. adjusted our the million GAAP EBITDA and per Adjusted Our margin quarter EBITDA effective $X.XX. XX.X% were a diluted previous both our exceeding our both

free the of as was million quarter flow Our cash in $XXX a a previously use outlined.

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

and Our X% with a fourth on Volumes in TiOX expectations. continued by came Europe, sequentially increases XX% in versus East to Pacific the improve our our Americas. TiOX basis range. and Middle quarter previously line volumes pricing guided year-over-year Asia X% increased and the by Africa, driven in within

as from We due realize result continue backdrop. to a trends despite remained the production as the which favorable volumes $XX our XX% year-on-year. quarter of the lower commercial to lower increase against largely pig driven products deliver prior Revenue other macro volumes fourth prior events. pricing quarter, a relatively an million, and decrease pricing. strategy declined of iron by XX% current Zircon represented of and to flat Zircon was anticipated to pricing the year,

to year-over-year. opportunities versus sequentially waste sales sales in headwind was the considered year pig which as first revenues prior strengthened the earth enhance fourth. quarter The to potential offsetting space of in our the stream. XX% increased compared an Partially earths, lower what continuing evaluate a currencies to earnings but from We're the rare euro were was improvement to iron rare previously the represented

in fourth stated first second saw the it quarter -- earnings continue quarter We we we be for the was. call, at second to to TiOX in the last albeit As than the rebound the levels our on expected expect quarter trough continue and still XXXX. to lower relative quarter, to of the volumes expected

recovery quarter the This volumes mid- would in quarter to close the the gap from versus a volumes to into in prior the begin first the prior second mid-teens to in represent range. high We increase as the expect year range year. decline pigment sales teens the

to Middle the flat benefits reductions, first overall the with recent in pricing initiatives our anticipate significant be continue second the America. pricing the East quarter, and declines to stability see we financial largely to We'd driven in to volume Even slightly Latin the quarter TiOX of by our down from results. our margin

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

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

Jean-François Turgeon

Thank morning. you, and John good

to Turning Slide X.

quarter. the cost production rate fixed and costs. $XXX represents driven unfavorable of processed lower EBITDA rate, higher and volume. chemical to XX% XX.X% offset was site favorable Adjusted costs by freight EBITDA costs, improved absorption by adjusted partially margin Our was pricing, This lower due decline a sales for mining year-on-year, exchange lower million, higher

and On roll-off improved product from LCM This improved headwinds. offset improved a costs, by and mix corporate sequential was improved basis, pricing. adjusted due and other abnormal to XX% rate higher partially QX, EBITDA the and charge freight exchange sales volume of

are As in quarter the are was report being the toward KZN John and resolved. the we Africa happy to KZN the QX working at fully event I'm in able the Atlas the in and middle up Campaspe by mine impacted road Atlas and facility outlined, our South to the running primary of use Australia. year. is impact

previously higher. range X, be level Despite million this of QX, run in low January on we $XX EBITDA EBITDA anticipate headwinds of approximately our $XX XXXX time year to of In running our achieving at million in Atlas had guided full recession the total, been case. rate cost to EBITDA, the a end the Atlas adjusted fully would

Turning to Slide XX.

continuing a position landscape As are success. to to navigate Tronox for macroeconomic backdrop, action current of we take result the the and

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

travel against We execute discretionary We be in reduced result a We our quarter our continued implemented which playbook, can other seen professional first and financials. have cost-reduction fees, the hiring costs. to of freeze.

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

prudently managing working are capital. We

first of in move the the year. a working of capital line quarter we through saw remainder as the expect release our to While we with a expectation, see built

we and in the first took QX, quarter, in a feedstock mining driven upgrading slightly on action the current XX% down of resulted customer by of our long-term will year-on-year is production. costs reduce demand, year. quarter XX% production higher in This While our feedstock target strategy which in result TiOX be the lower level, vertically second to which to was approximately integrated as continue

On annual spend previously, significantly to to year volume implemented million capital highlighted growth. as have $XXX with environment investment, macroeconomic the it to have by associated this we delaying plans adapt below reduce to primarily expenditure, as we capital our unfolds

will projects, and time this flex this is benefits from capital appropriate our delay our to this spend. While the with we business to consistent key do is ability at the believe decision our ability realize capital for our

positive generate free flow to We across Tronox variety actions cash anticipate these our including scenarios case. a recession will enable of

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

to turn the on I provide call over, I want briefly Jazan. an Before update

As agreement. purchasing the we under operating one is and mentioned, of the furnace Jazan the we slag have of continued term have

disclosed the have in on Agreement XX, May we filings, As our XXXX. Option Jazan expire

We agreement. under TASNEE Meanwhile, are term Service smelter discussion agreed we have continue we of and the with about extend Jazan's may work circumstance to support Agreement the in with what TASNEE the the extend to Technical complex. to

as the we be in the of as project, the late XXXX, The form cash of term remain $XXX kind. paid can unchanged and which be repaid to loaned or million can in June

on update market the the development keep to Jazan. on continue will We

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

John Srivisal

JF. Thank you,

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

XXXX, amended the XX-month of net through approximately extended interest interest In rate swaps trailing XX% term a times leverage our and end rates of year first fixed Our are X.X approximately with XXXX, such XXXX our fixed through maturity from the that we XX% at basis. quarter, the of are loan. was on the our aligning

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

expense quarter. totaled million XX% million Approximately expenditures was XX% this of $XX for was in quarter. maintenance Capital growth the safety amortization capital projects. the strategic for and and for Depreciation, $XX and was depletion

of due inventory JF mentioned This higher declared per we John outlined, a paid million. for free payable. that accounts per our first lower reasons second dividend in and In quarter, the share build use the annualized As owing to quarter. share improved was equates receivable an basis. a cash This to our accounts was $X.XXX on earlier, to the sales flow $XXX we $X.XX

a adjusted employ Based risk range our to we to our million Tronox, forecast. in on At second quarter operations bottoms-up XX. opportunities in we this robust a analysis the anticipate markets, $XXX slide of in be and to million. Moving the current view, of developing our a EBITDA and $XXX

We now that increase to mid range are up forecasting volumes tons, and approximately will Atlas running. the assume high-teens XX,XXX are in improved and volumes zircon from KZN TiOX QX by and

TiOX, we pricing to assuming be slightly for are will down. Additionally that flat

cost to impacting We continued production as product see and impacts unfavorable volumes from are cost absorption also improved mix zircon mining assuming margins TiOX to Atlas, from relative pigment volumes and fixed lower rates. unfavorable

further of cash XXXX cash assumption flipping approximately securitization. our the remains million. We at for uses, Pivoting the a $XXX AR capital capital to our a anticipate cash the expectations use of working for from our remainder into including working source same year of

approximately $XXX assumption Our million. remains net interest cash expense

cash approximately less FX year. our expectations expenditures remain actions, to And expectations earlier capital JF million a business. for for shared taking taxes to the $XXX $XX million increased are zircon unchanged at currently increased as rates. sales the due expectations Our for have and than we

We sufficient and liquidity to our to continued are ensure continue the and can environment of to costs in. against pull we and the economic respond assess execute operating levers, to will we production alignment

will our We remain remarks. commitments. on concludes That prepared focused delivering on our

Brika? I'd like for the over questions. to that, With call turn

Operator

you. Thank

We now Deutsche from The question-and-answer Instructions] question will Bank. David Begleiter the session. [Operator we first comes have begin from

with You may your proceed David. question

David Begleiter

little about bit versus John, seasonality? the $XX than increase why morning. is Is less if a And JF QX sequential so midpoint. normal Good that in Hi. that? at million the is QX

John Romano

wouldn't QX from albeit I guess season. increase low say coating I necessarily of would in I levels. move QX saw off we that's than David, know – less seasonal the very Clearly, XX% to you

with there destocking the quarter that fourth we that and on of had That's So going and demand a quarter lot is the be seen forecasted last the mixed what that fourth in fact we had what we call communicated in have dropped trough. was on saw. would

visibility When QX numbers good into where QX into we about think moving pretty have those we are.

a to like. So, is going it's good April what we idea look have XX, April pretty

is moving lot more order a Our book into solid. May

are would on a have we orders higher picture June typically We May. better in May. always see than what

So it's highest typically that the second quarter. in month

see lighter So in presented. range still what that feel and May our May in even comfortable if were June or even to slightly the just volumes somewhat similar we we with we

Jean-François Turgeon

Yes. you will in compare thing be I if macroeconomic line XXXX, with QX the this to look And would only David of it add environment. still year that's lower but the

David Begleiter

thing. last one just And Understood.

On operations? the this if might year the can quantify Atlas the mining or to operations return and more were that resume impact what be for to normal year next you tailwind

John Srivisal

as John up additional of And Hey, the Srivisal. the million million for been a more to And year. that David, that -- had Atlas as similar be improve costs JF it's $XX ramp We benefit if and it an mentioned, full question. Atlas Thanks Approximately see get do running and up would year. productions was for year Atlas for million to see we'll $XX and impact the we of that improve to throughout QX. million impacted $XX QX. $XX

David Begleiter

much. very you Thank

Operator

you. We now Spector UBS. Thank Josh of have

open, line Josh. Your is

Josh Spector

at Yes. I the that guidance to your for wasn't JF. something that it just just follow-up to taking of Hi. hypothetical XQ Thanks recession rate low question. in the if that be you expect case. my run I you is right a sure said want Is scenario? end heard on or I

Jean-François Turgeon

with that recession about I I I I feel end at think of the that. low mean, recession Look range for the Josh. QX we that mean case feel scenario we scenario, our confident think our confident of being And

John Romano

that follow comment call it appropriate a we to regards that with thought the specific last still Joshua, up Yes. last made to we because on we're that to developing. made is and business it comment the how comfortable was the quarter I with

guidance. opposed an So quarter to follow-up as kind last really what to of that was add-on strict said just we a

Josh Spector

Okay. that some there could some about than that of need and bigger end than other in the run your I would do bit is more that if XQ guess TiOX everything I little appreciate and we And is quarters poke I of else? costs of that. the terms $XXX if I what you seasonally I mean on I think get rate at a guess guess Atlas on to million? imply volumes low greater

Jean-François Turgeon

clear Josh, Well, happen so -- year. guidance. half will in didn't of there's we much to in unknown give the what wanted second the We

we're to of as I our to it cost. Atlas takes the year. the think the products related mine, those road that, open for cost with in to explained know, be But what in John middle the you pigment time the expecting reflect of

have related mine. also that happened. expected than in to So, of We'll because Atlas zircon those have volume costs year still this up, higher QX we of moving events

we model. mean, I our confident So feel business about

John Romano

growth but not only growth, volume And zircon in well. TiOX there'll be that as

think start we the is comps be down. But year were because to third significantly where into for a we comps quarter. to third our the lot going last made when quarter the So reference this of about comps, was quarter easier

again that we've the reference on to not outlined the So as but guidance we recession the recovery direction Again, of we're case of over last in quarters. the of the providing made it's when moving that. couple in we're confident we're QX, range

Josh Spector

you. Got it. Thank

Operator

Thank you.

Goldman Sachs. next is Your Fischer question from Duffy of

line open. is Your now

Duffy Fischer

and the be Yeah. Good a morning. will you out America drag those physical printed Europe, it flat that you and your think down or just price? down to where down. Is on around being prices will called your mix issue actually comments regions Question in pricing Latin

John Romano

Duffy. Yeah,

we're with driven some So And movement against of is in in the some will be pricing East. Chinese. largely where areas the look competing that there Middle

thing. America, Latin in So the same it's

the actually talking America, at quarter we talk to happening mix there we and also the downside how competing up selectively some to determining price ours. some price and we're And adjustments as price but those is the flat what's to more second in is ended where when as with first Latin the is in But But with in Chinese we're - and them, up still the talking lot X% in slightly there said movement flat issues East there's than we're movement about we on are mix, about a some up price. make significantly we're down lower Middle is quarter. and well. and their well. There areas there So and directly we there slightly again,

So there our there's what about not our a around the around lot of been talking business reinforces of around movement in of group. commercial we've margin in initiatives stability which the we've put some place stability programs

Duffy Fischer

Okay. you guess aren't year? Chinese think then do to net numbers the flat? yet, because up or if versus been exports And what but out year-to-date last down have had they Are you the

John Romano

so And up and did They but we And was are they we we range. about which on It do -- on when up. in April's sequentially. depends you somewhere don't $XXX have yet. number But significantly pull obviously March it get wasn't what have the think we March's. out months -- have

One of the Europe. bigger areas obviously is

that a more exports So that you to had go of in down Europe were year significant the earlier lot you had saw some with but a exports of dropping off. the bit, do

we're a on competitor. And get the a cost. we we as why lot with our question them China and China focusing about see is something that's what's happening -- So

about that recovering. back. pulled volumes are is volumes little a have another example. talked Our bit India We

Our expectations have is a XXXX and good year. XXXX increase in a India year-over-year, to was we're XX% for going

price we be confident in to we're mentioned managing on going the put business that to as but feel the continue our selectively we're I grow with able we we're how So that line out. against with projections dealing Chinese, previously to

Duffy Fischer

Great. Thank guys. you,

Operator

Markets. John now We of Capital McNulty you. Thank BMO have

may You proceed.

John McNulty

the how morning. And bit two, like I sounds having guess, than Yeah. to low Thanks the why confused -- to running the expected. first expected improving to for then a first lower that inventory one you I XQ you're Good be going are you with my mid quarter the harder after I be volumes had the what did XXs as something little in margins upper cost through obviously despite the teens. to happen? assets question. guess, first you in taking in quarter-over-quarter I'm in lot was it a one high-teens working your guess, by in quarter

can well. help guess, I understand So as you to us that

John Romano

you take if that first part I'll JF, to piece the it take the of of first. Maybe question. cost So, want

Jean-François Turgeon

start mean, material, I reason that high-cost I has because zircon Well, obviously, to John to of this our and is I that QX an us. overall costs moving Atlas line. are on mean the is, the impact material Because in is mean the we're see different a going

on So that has us. an impact

John Romano

part can can apologize. you question you go again the first rephrase ahead And -- and Yeah. sorry I'm your of I

John McNulty

No, Yeah. sure.

said prepared in that The like the first happen, think through. cost you part lower through guess, I that remarks running saw P&L did when inventory you you what had I the had QX that? how drove

John Romano

Okay.

So that of was a lot zircon.

we So we that of off, that would Atlas in were well more we And Atlas. orders of expected could have been we actually to have was ship. referenced have what excess able ship out material would that we because had

have actually is of projected out So come for had to our had reposition of would lower some were some out of or gap which historically to to inventory would out Australia. fill inventory been come South we of have we that expected we what cost what the Africa, able

was that that. So

around And TiOX during was moved of then on inventory I pandemic some at we've also lower some that in the got that we locations position cost. mean other our

those was two cost pieces inventory causing we that the So what that. are reference when lower that was

John Srivisal

just And we the decline the is margin back why a Yeah. seeing are reason hopping mix. question, to

faster our sales. growing As the high-teens and that mentioned, than zircon expect to we TiOX in mid to range grow is

know the margin. gives as and you the impacting higher bottom contribution to that's line a zircon So

John McNulty

you that chance to a the one Can now? realistic of one far it And Okay, getting as us how finish to line? maybe you Jazan. sense. an last there's on run update is then rate got asset target give if it. No, off And from think that just right make the

Jean-François Turgeon

mean changed still needs I the TASNEE what we're the increase working be is with to John, furnace to to rate, at see which operating. Look,

we hasn't the at So is time modified that XX% running is last of been at that furnace mentioned running the running is as about order moment, furnace capacity. and one

John McNulty

Got it.

color. for much very Thanks Okay. the

Operator

Thank Credit Suisse. John you. have now We with Roberts

Your line is open.

John Roberts

you. Thank

one Just question.

One I'm electrifying biggest operations would carbon targets. the any thinking those and facilities? your reduction are achieve the be of by the mining maybe since hydrogen make to changes XXXX can can type to projects? longer using that heat And of happen those -- you conversion

Jennifer Guenther

the for This is thanks question. John Jennifer.

So great question.

If coke, you look at they our footprint you electricity, gas total XX% the our from a total GHG and drive perspective, like of natural coal, if anthracite emissions.

announced solar Africa. the of South Group amount us in the with come from global due saw project You Africa year our last significantly to that smelting significant GHG will emissions the in reduce just South operations that emissions Solar

GHG XX% electricity our renewables there by will of them our emissions by XX%. shifting global So to reducing impact

electricity, to we at we're the but energy will we to to those focused on further So on focused and renewables. underway, have technology the projects the areas look target the and reduction natural are newer get around on XXXX gas. are interim Obviously

John Roberts

Thank you.

Operator

Barclays. go you. now Thank have Leithead ahead. Mike of We Please

Mike Leithead

you. Good Thank morning. Great.

two the second on mentioned piece. you're extension to I that still First piece just One, Jazan the you think and one an renegotiating update.

versus still So can clarify just extended under part what what negotiation? is help you part is

knowledge what of question. to Obviously or what five earlier so doesn't. second works, pretty just working years good for this been an an you've circling back at And you've so got about then now,

if to can rates what out, when guess both time realistic reach commercial on figure is you I So or the furnaces? frame

Jean-François Turgeon

Look, Mike, have is have them. the for what So, Agreement Service Technical thank the question. extend you with we TSA that the we

of So which Metso we is them basically, were technology helping Outotec. with provider the working the

see and modified be the and would and question, and improve we're our And effort to need to we existing continue X. we to be negotiations. would the necessary a their mean what furnace on metallurgists, I how can in metallurgists second on So it's have team what modification furnace,

John Romano

It's running if Yes. -- standpoint I it making Jazan not need we buying we think the we're is you at from where stage the mean, rate slag. are it. at X, the of about that

So, work We're which volume that we to thought we in time more to with can at Agreement a as is, mean, I opportunity, with May can We're that discussions asset up it. the TSA, on the to would does the what asset. figure have progress, out making would but if forward them buy not get interest five looking XXth. there's agreement. we have years. trying we to we're how Option path of an out last you that this Agreement allow But tell to the over significant point particular an us see, come with not in to the expire in the and extending continue Option

Mike Leithead

it. Got

John Romano

is sorry, that. about TSA –

Mike Leithead

That's, you. I on then guess capital. just your about And super helpful. working Thank to tying

purchases that how that obligated $XXX part this that just about much just a is you're million are think build guess, I working is year? expect sell where given operations this buy, to your you slag year capital talked I to and you of through that related don't of Jazan. pigment to

John Romano

It's about build. XX% that of

Mike Leithead

you. Thank it. Got

Operator

of DeYoe We Bank of now America. Matthew have

Matthew DeYoe

out from Good the production morning.. If $XXX I wanted to parse costs year-over-year. million just headwind

million seem was I how fire, is through walk you Atlas Could of Slide was to rest $XX of the $XX kind like was that? It think much million. much it the inflation. X. How

the at kind Atlas -- like know production presumably a not remains, because So Atlas of seems then I where don't as those non-KZN headwind headwind fire we look this should headwind, I KZN magnitude. I'm know easing, go? but a start we But some guess is still bit. the costs order XQ, of of does It

John Srivisal

primary as from costs process the drivers just just to that Yes. general The a chemical higher at mines side. of absorption as well relate and sites, pigment

John Romano

million the it, is impact cost said know And And we call ramping million us we've don't $XX start say When down, throughout going it's year. the of half haul to when it road -- to I did. $XX how second Atlas we on the year. and QX was if million think $XX opens. $XX and Atlas, if think QX the to for that in you in down I million we year, much the repeat going we'll about ramping it, to But

actual So way, It's material not it's it's the the going shipping higher that's through -- that material. the we're not the working pigment in selling. its cost be to

Jennifer Guenther

KZN, slightly the available running at zircon costs It was February. it for as in the impacted running and rate. is And currently on slightly had we remainder of the lower But, our spirals fixed higher first sale at in full it rates. quarter

So, it the even further and quarter impact fairly the no first forward impact was minimis. de has going in

Matthew DeYoe

Okay.

in of guess on I so, some the you out, Where hone to expect rest do kind were that the if at trend? least to the of And for I or year inflation. based shake of non-core

John Srivisal

year, for I or the in you're haven't which expect rest to of And So QX. it liked looking the X% be overall, at. for decline we depends rest experienced mean material overall to we year, the down the that We would significant about do have it the on seen X%. of really

We seeing obviously lesser -- biggest natural lime. electricity, area are as the acid. extent as the a anthracite, and we The as will particularly seeing also sulfur in chlorine, to well benefits gas, in sulfuric is some increases well. are caustic UK, But biggest and

Operator

ahead. have with now Thank you. Jeff go Please We JPMorgan. Zekauskas

Jeff Zekauskas

the expand global much. in or contract very how volumes? you to When XXXX, much look TiOX Thanks did industry back

John Romano

single digits. High

Jeff Zekauskas

Contraction?

John Romano

Yes.

Jeff Zekauskas

what's as And this the industry year? for a whole expectation your

John Romano

they specific last speak the first industry I relatively to strong. year about and quarter hard When flat. It's but second to think the we were of say would

first the see third. that seeing were quarter recovery fourth we extremely to and in would and the in the second We're and expect Third the weak.

the but the last quarter of of not what of year. kind almost as first last year inverse as it's we the pattern exaggerated was probably in it in So fourth quarter saw

Jeff Zekauskas

spent? Okay. much much of much still be hold? even Project spent newTRON quick put Can be if us was much saved? it's future? how in saved is on How needs How was to the a that you give summary could How

Jean-François Turgeon

our on So of work doing doing Jeff we're maybe we ask on we some but I'll costs it But have – more to support. I still that we we we're put newTRON. more own. when haven't our our we start when and said external control say that We're stopped to internally, reduced John working mean add hold, I'll newTRON we color. of

competitor. we're related still and on I when it as they're But the the that element. a that that And we all project of volume-related for costs to mean obviously, see to mean costly volume-related picked market and good the up. fast. less newTRON lower available value I we cost put debottleneck it's they're were now us because that project down slowed progressing like those us that better we'll hold. have make for it's do The not our and still reduction, But

John Srivisal

depending past perspective, from And previously expect factors two we $XXX expect do different it on the $XX lot to what And to a we we but years. decide over program. in million CapEx million, disclosed – another there a million spent on that $XX the depends spend with we've about spend we of to

Jean-François Turgeon

tasks would some in people hard number reduce it the plant the of the site our we're I of been value at our project. people process – helped us our to our of has us it's The to gas had advanced from getting allowed mean skill. Value where impact. our control lower replace lots to and petroleum we have and consumption has retiring allowed greenhouse automation coke

So could market we're on journey that a a we on journey based it's outlook. and adapt

Jeff Zekauskas

mentioned the might Okay. some that devoted in the new earth of in be you beginning capital would that might you rare kind or production. interest that have rare call range? of devoted to earth, How much At be a to

John Romano

Yes.

for we're that Jeff, it's we've waste revenue new new was the in historically, that this the on now stream. historically really So of us. what I into a side think converting of last earth rare a and that said couple It's calls not stream it

in we we disclosed compared kind it around of were quarter to ramping significant last XX% quarter. first think million. year, the I increase where last up That is was $XX So

think So that that $XX million. That's something about million. that would we about This was talk business. year to going when $XX a relatively about be be high-margin self-funding. also mentioned investing, we it's And

actually we're in might So natural something explore. might we extract of it. looking to we're continuing mine be There's it's miner, we're think we that able rare our we And be earths something business. how and extension that a a of to current at lots because interest

Jeff Zekauskas

much. Than you, so

Operator

Thank you. Please Ahmed Alembic of Global. proceed, Hassan We have now sir.

Hassan Ahmed

I JF. if the on the and of bridge revisit and the Look, sit just made call comments wanted think I some to I quarter to John mean, morning, about QX earnings. second to Good there about sequentially, your now reported you QX, would high higher end And $XX million. if hit to million guiding guys QX, EBITDA right? of the QX $XX you you towards, of are guys have range, to guided

So, I bit. slows a of guess, down the momentum sort

QX will with sort better your to But sort QX otherwise, TiOX higher -- compared understand, commentary volumes QX I'm of QX, suggests just show percentage growth. the of to trying to meaning

as will will running, volumes up well. up running. -- fully be will will Atlas and be operate zircon and up KZN be be Your

are down? what log you Why So that going did QX million now to QX guys $XX EBITDA slow I and increment to am saying that incremental missing? is that

Jean-François Turgeon

want do John, to you start?

John Srivisal

Yeah.

I that to more as so but that -- being beef lot don't all, we and was mentioned, -- QX it generally relates less of a currency we see TiOX, secondly, -- and mixes QX a part we unfavorable some our of as of first have think, sold. less much was zircon impact QX. in And product do big

And some expected inventory selling which was cost that John than QX at QX. in is lower we versus lower about on margin commented zircon QX, in the of what

particular, have the as a particular cooler costs. And I big is secondly moves in mentioned, Africa do we in months. higher as In then South part electricity

just not wintertime. are We significant just the a very seeing the for pricing, surcharge increase, from but

John Romano

volume made that So pickup, guide. even good where other TiOX the piece, right? about point, and the comments about I the pretty feel And, in think Hassan, volume we the I when think the in are we I in think we

in pickup seeing are China, some right? We

probably margin our area. is best not China

the picking a we're mix volume. also on the there's on margin So up actually where

of all margin volume wheel. that the in margin probably of So, not is lower challenge, specifically that it's say but China to on end some that

Hassan Ahmed

QX, just with of Understood. intervention And guys the you that, seeing at as the efficiently I a in government some are sort particular. these causing follow-up, mean, I very I Chinese the what just through there around was noise lay in China price producers out of some like seems wanted to of course mean, the of hikes. to of sort essentially regards land, least to implement it producers, TiOX get

interventions ramping of, place? Is we are government there? where still So in up sort there? those, Are capacity

John Srivisal

look, those comments that So, again, made -- actually comment. we

to your recently pick that at this central up. government posted South conference around think additional continuing to I something with Morning when first We've week, seen a about Post as support is China governments the loans. the local started talking these we very article not similar

quarter. stickier increases China in they We the have So price were than a pricing? still are on were -- how in first announced impact historically does of that They seeing kind been recovery.

TiOX So they is the least seen business, but in at several matter months, answer course the any the last the of bankrupt to same we is, in of information. report the fact space our no, have over the companies going continue the

at would what but that seen. lot it's So, I still to yet of there supporting a There're mean, expect out commentary earlier. referenced some we in happens, point be I time, still

Hassan Ahmed

Thank helpful. Very you Guys. so much,

Operator

We you. have Morgan now of Thank Vincent Andrews Stanley.

You may proceed.

Turner Hinrichs

This for Turner you for Thank on Hinrichs Vincent. is question. Hi. my taking

John Romano

Hello.

Turner Hinrichs

Hi. Yes.

newTRON savings normal number your now cutback can million being flood that end you mid-XXXX. think to do the in to XXXX How were you've close Atlas fire, by a program. targeting run ton the around spend, of from more the about $XXX to confidence before you get XXXX million of you by that exiting So per and closer $XXX rate got

John Srivisal

million $XX an and of And $XX savings -- things process XXXX. previously XXXX million additional about we've some savings that in control the So in expect million some newTRON in do XXXX disclosed JF through more to that we mentioned achieve we $XX like TOIS. expect advanced in another have experienced

primarily related the guidance doesn't -- fire our Atlas. Project So that's, now. related or kind KZN newTRON to so It of, it's right nothing to

John Romano

Yes Atlas is -- wasn't part of newTRON.

Turner Hinrichs

for it. Thank the Got Okay. clarity. Got you it.

would hear inflation. of light cost in the chlorine for dynamics to It one. be sustained another interesting about Just

could mean, an detriment in actions change I see from strategic Specifically, And you chlorine if your quantify chlorine continue around how benefit prices? incremental inflate? or is to costs the you for would appetite

John Romano

for been chlorine, So US. the I look has an issue think, us in

nine We of plants. large have are TiOX those chloride. majority The

So we purpose-built plants. have

facilities companies our have where own that have facility. of have -- Saudi we actually Arabia have our in chlorine one We we

we we what look as do to So our in to We've to good depending from We're on up the the significant market. at move to options going strategic with need we a got in XXXX. slightly. increase Pricing what has continue forward. in perspective, XXXX that might We saw upon continue long-term suppliers. gone relationships happens evaluate

US. but point it's So focal definitely a for in us the that's predominantly

Turner Hinrichs

color. for Thanks right. the All

Operator

Thank you.

the Spitz of from question final from America. comes Our Bank line Roger of

Roger Spitz

is you morning. be to for In do XXXX Good quantum outflow? QX, that you. a a capital further Thank working that? And have expected

John Srivisal

we QX neutral-ish. as we year. rest of to -- net is mentioned do a expect the the basis On I roughly throughout recover

Roger Spitz

Neutral.

Okay.

and of caustic plant Saudi you much -- the most so selling? a what's that you're Are or selling have you caustic all ton And chlor-alkali in that Arabia. annual caustic of capacity of how met

Jean-François Turgeon

Look Roger the that for pigment plant is built needs production. to our

on Arabia. caustic. plant So can have also sell caustic needed pigment a Look now export is that our the we're that obviously, as plant and it Saudi from Arabia not that we consume for Yanbu chlorine just plant. flaking outside we it we produced in the market We selling Saudi the in

John Romano

a to that. We're export point development to And starting that that's recent caustic. selling we're JF's where

Roger Spitz

to the volume market? you're sell have And able the of classic an do annual to you

John Romano

think you of of if X.X caustic production about caustic is Well about ton -- chlorine.

upon about the depending rate runs a run So we're tonnes XXX,XXX running asset year. that that that asset

probably in XX,XXX somewhere how to depending we're upon the running asset. So tons XX,XXX the year per

Roger Spitz

commercial Great. flake, Arabia. not And and lastly not caustic the typical said actually you at when you're outside grade XX-XX water selling least Saudi

it caustic way solid actually all You're evaporating selling to it? the and

John Romano

it packaging correct. And

Jean-François Turgeon

Arabia it. bulk we also production it flake sell XX-XX the of the in do Saudi but facility have the that's We to

Roger Spitz

All much. use a lot right. Excellent. energy. very Thank of must you It

Jean-François Turgeon

There's low-cost of Arabia Saudi in a things lot with can do you energy.

Roger Spitz

Thank very much. you Good. Yeah.

Operator

final you. would Thank now I for remarks. any to Mr. like it Turgeon hand to back

Jean-François Turgeon

call joining today. for you the Thank

priority key remain Our for unchanged. XXXX

Tronox economic and align on to variety focus customer our manage costs sustainability prudently benefit reducing project cash production of the We and generate per cost our without will a flow accordingly, ton reduce long-term with safety, free continue including maintain scenarios. and of capital sight losing key relentless to a across demand

Thank Have day. That a our you. great concludes call.

Operator

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

Tronox (TROX) 27 Apr 232023 Q1 Earnings call transcript