TROX - Earnings call transcript Q1 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the Tronox Holdings' Q1 2024 Earnings Conference Call. [Operator Instructions] Also note that this call is being recorded on Thursday, May 2, 2024, and I would like to turn the conference over to Jennifer Guenther, Chief Sustainability Officer and Head of Investor Relations. Please go ahead.

Jennifer Guenther

Thank you, and welcome to our first quarter 2024 conference call and webcast.Turning to Slide 2, on our call today are John Romano, Chief Executive Officer, and John Srivisal, Senior Vice President, Chief Financial Officer.

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

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

to However, or results on conference risks forward-looking nearest evaluating actual to we presentation. release to the the performance. vary Reconciliations may these that GAAP company's U.S. and investors no of in the terms refer use in our and based management in undertakes company certain obligation uncertainties. are in of financial our their the accompanying are business non-U.S. call statements.During terms revise The provided and we appendix earnings the will useful to GAAP update any believe

please comparisons a all Romano. my over the John to noted. otherwise turn during financial is pleasure It to made that basis unless on the year-over-year John? are call call Additionally, note now

John Romano

morning, with and the everyone. this Jennifer, Slide begin X good Thanks, on some morning from messages key We'll quarter.

market in a the outpacing and course run than the ability normal product due of with in XX% XX% which revenue see TiOX of production our preliminary volumes the fourth The earth this costs end revenue would be from the XX% both largely outperformed XX% seen our South over supply deposit Latin of global TiOX rebound alone, a relatively anticipated. to excluding increased Africa. and sales the on all by quarter a type and region the the As Demand continued muted. decrease that year.However, and through rare East of portion so trajectory improved more production for indicative having through demand prior stronger recovery. strength zircon delivered mentioned from to increase remaining to respond Europe, even our of declined recover across is would saw non-repeating ilmenite on footprint.Our through in XX% or the and to in exceeded quarter our its lower despite our more quarters. tailings of seasonal XXXX of quarter we significantly to X results other of operations, Africa what this sales China compared chain, of where July our driven Middle the trough This past in first underlying demand typical by stronger we announcement, expect to costs was driven in front growth to volume through and the global time levels volumes our paired America, destocking and that guidance more Zircon demand

incurred we at volumes in side, for increased above costs rates XX% our was zircon running QX, was our Pricing due XXXX lower of XX% our XX%. demand. to in underlying from with the significant expectations.On well guidance TiOX utilization to assets line Our which softer versus and operational

when above our had last market compared manufacturing the a began late our saw we turn rates, quarter to operating range. impact our first EBITDA of year, cost result, margin better-than-anticipated a This adjusted helped both the and we guided totaling almost to $XXX million, cost.As EBITDA prior increasing which drive As the beginning year. was our which on prior the XX% positive quarter improved and to for quarter

to in downturn. margins chain, realized to efficiencies to through costs move investments from to cost high business the the levels return prior the our enable As to reduce supply made inventory will continues internal

the the change forward.We're trends our to the well believe The first a demand reducing costs point. cost continue and step worked in side quarter way remaining has the high much both sheet. delivering on been balance our in inventory our going inflection power, on on earnings We a of will through already true having

million, liquidity increasing we're contributor quarter But we're from power project year.I'll from journey officially to Our avoidance where this an alone our the the power high we free first that also clawing was in COX XX% for emissions already quarter not happy receiving cash cost a Africa.We're realize the on second a is and area of sheet, total this for total from run costs emissions, we to it significant and XXX savings our a South of flow use team South result the underway.On flow will consolidated million. of an repriced benefit and annual This of focus. highest on is a to And will today, term business. front, sustainability net development John through of additional time XXXX, cash for to next proud we but of numbers wind, positive well-positioned remains zero megawatt by will the the the generate confirm is to work Africa, quarter comfortable South to the expect X capitalize we began to baseline. Africa. provide in with as which cost we relative of carbon $XXX XX% a beginning estimated recovery only agreement reductions approximately debt $X balance our that use electricity the to more so as we it'll solar our stand but this continue this recently begin and continued We from on project to in are on purchase in back full in I'm free the strengthen let working loan, as here XXXX has position. are tranches a our how some

that water and our the social waste to have to John? and end initiatives for and quarter safe future.At manner report will firmly people planet XXXX responsibility We preserving our do to sustainable.I'll both some we of turn operate this more. detail. sustainability a the in the financials privilege for review our our outline out our that and strategy us and to believe critical across is now more and initiatives carry the as over today expect key to a John day, and our result these a from management, so We reduction, that is other work of publish emissions to call in our quarter enable our

John Srivisal

you, Thank John.

loss sequentially, year million, million zircon. revenue $X both to reported X. by Turning quarter generated an to or X% revenue of of and from driven from higher in the operations We XX% $XXX a was million. of Income compared TiOX increase we the Slide prior and net $XX

in before we the taxes, $X our earnings our generated was higher-than-expected tax zircon fact expense This driven where by profit tax we While due million, to the pay that $XX mainly million was in was jurisdictions quarter. sales. higher

to result, was cash margin adjusted for was XX%. our EBITDA $X.XX.As X was was per our of $XX of a a As million loss from earnings adjusted mentioned, and $XXX view adjusted John share Free million, approximately a use our move flow of Slide in our was EBITDA previously diluted expenditures.Now of a commercial quarter let's $XXX capital which performance. million, the

we largely versus products expectations drove increased the quarter where in and both stability versus prior year our expectations line more XX% the The improved was deposit with compared outpaced X% expected, quarter underlying with revenues increased XX% East, was prior consistent decrease would comparisons. America our TiO mix saw in TiOX our margin X, and X ago other organic as TiOX across from to we Africa, had repeat.Turning John rate decreased see growth As will saw zircon quarter, not both an Zircon Europe, our declined quarter, year. quarter I performance of volume that, portion the trough a by driven in demand program. fourth recovery by past prior versus QX. review XX% Zircon restocking, and sales rare which volumes a notably and and higher Pricing driven quarter. and Latin the our prior the in prior with the and the increase South in pricing and recovery Slide in earth regions X% now volumes sale quarter was volumes all with levels last the volume quarters.As Middle mentioned, for demand XXXX July We've communicated continued Revenue stronger to as level quarter-over-quarter. recovery sequentially. operating of in from ilmenite pricing XX% a the with tailings opportunistic including of Africa quarter.

volumes, such and is exchange selling higher in soda. XX% $XXX year-on-year, decline partially coke, input as driven by Our tailwinds improved caustic offset from sales of and materials adjusted favorable EBITDA prices and represented chlorine, This cost SG&A. mix reductions by lower rate average million

as freight Additionally, we XXXX.Sequentially, saw costs adjusted EBITDA compared and improved XX%. favorable to fixed cost absorption QX

the zircon for QX the expect downtime freight versus outage end As now of ended primarily we supplier repeat rates FX, Atlas.By lower from and quarter $X.X the in deposit of we in the non-repeating of net rare claims to the favorable Compared was insurance to Botlek a last with The as portion from did our higher tailings at production lower and our year higher cash billion. charges of improved $X.X as facility see and and costs offset position. earth billion year to TiOX $XX late QX. and that we opportunistic mentioned benefit $XX $XX relating our expected million to million. Botlek million operating costs headwinds of charge price this the $XX recover I Slide partially and the quarter, relating beginning debt mining Other in quarter million review year. expected continuing the from $XX Red million increased We were was approximately This we and production, the due to to QX, market and QX prior EBITDA due to X, SG&A.Turning of debt to into sale absorption will by the supplier total not from cost impact from improvements mix, last ilmenite balance costs idle of the Sea outage. to volume sheet costs comprised

leverage the of Our March X.Xx basis. at net a on end trailing XX-month was

integrated vertically strong critical of -- remains ample integration-related ahead sheet balance Our anticipated expenditures. capital liquidity with

the completed term As John of repricing which savings.We our on extended interest of XXXX. existing X approximately also these annualized loan expense $X transaction one a million to will result tranches, in successfully of we tranches maturity of mentioned,

we nearest Our no maturity covenants bonds. remains our term XXXX loans financial significant or have and term on

term our interest majority to expenditures of rates which are expect normally interest to are projects. Working March and growth average million totaled our available including increase XX% an of of in in quarter. of XX% XXXX this receivable.For XX% million tranche earliest first the higher capital aligning fixed million would globe. $XXX X.X%. the distributed QX rate increase driving well approximately our XXXX was Our revenue massive of of in the quarter. Roughly safety $XXX season. was of this, was rate in loan.Total liquidity and in maturity $XXX the was weighted and for spring in related see fixed million, are use We The the preparation interest swaps XX% cash strategic maintenance maintained in through accounts that for with coating for an cash through approximately quarter from across $XX inventory, such we a XXXX, XXst Capital was as that equivalents the and

turn on dividend quarter.I the back for that to and by While an source second which over is We $X.XX call shareholders paid was for of comments cash of some typical basis across first in at to payable production year now in the running per the resulted Accounts profile. upturn we a for a the of the our QX being share was demand on inventorying our the the annualized higher the business increased decrease, did a John ahead rates, quarter Romano plan in John? our will declared outlook. quarter.

John Romano

John. Thanks,

confidently can of reversal the what several and XXXX So demonstrated with a we we the last anticipate last XX stated months we in continue. from has already reaffirm the first quarter the behind trends recovery us, quarter. to

begun of pricing market range of recovery. side, demand TiOX front on already in in uptick in at million as China.On million we've expect that demand rebounded we indicative end trend operational see pricing, XXXX absence we were impact market, a to an we have of its significant downward end what and has zircon reverse the assets would of our the per TiOX XXXX, see move is we market. improve the soft we our improvements a to shift on the zircon, in On significant continue rates On beginning running the the to see positive XXXX.Regarding which $XX we on Further began operating overall of utilization improve has and major in the the China from remainder July due in Nevertheless, realized reliant to the a costs. its share will given significant demand in the will XXXX, the from a market, line rates quarter through in volumes the At manufacturing levels incurred of even demand. our there and $XX recovery improvement cost somewhat increasing continue to was first trough of be in with to of lower quarter. to

our business, sales margins move range XX% of to to guidance, still outpacing now the will we in be Although previous inventory some this EBITDA have the our high-cost with quarter.

technology sites product we cost on in and efficiencies, to a investing also And our focused process benefit improve efforts perspective, up. projects vertical enhance costs and R&D to as continue reduce integration.From position innovations which our We growth profitability. deploy will sustain remain we're will to to key ramp at our capital our

opportunities explore more review to the in to earth space.Moving continuing key projects now Slide capital I'll we're rare in Additionally, detail. XX. X

ahead reaching of key outlook we're excess a reaching to in this end quarter detail. mining $XXX of for These rates relative to to XX. our investments market continuing than are ton As more more ensure pursue and are the to life. very year smooth X mines our now I'll our existing end a critical return projects transition strategy life. in important to for These replace investing per our XX%.Turning pricing year Africa maintain to high million return of South and will $XXX review integration replace with to of advantage Slide and feedstock, in internal existing approximately vertical reminder, our mines in projects projects

TiOX For the to XX% compared to the versus relatively expect we both first And quarter. QX, X% quarter. TiOX and to slightly between volumes remain zircon to increase first expect pricing volumes and we increase flat,

QX million be uses million adjusted and range As to $XXX be EBITDA EBITDA a result, we're expectations expecting XXXX the to are cash to adjusted of $XXX in follows. for XXXX XX%.Our margins as

be to $XXX million. expenditures capital Our approximately expected are

Africa to expected expenditures capital Our as than net cash are less significant deductible. $XX are million taxes be the in South

the $XXX cash Our flow capital million, magnitude interest we expense how will depend to is move expecting as is to tailwind. and we're year. be working be net expected recovery The through significant a cash of market the on the

we driving Our from are strategy strategy cash in integrated are full generate investments critical at our prioritizing vertically investment positive even portfolio. furthering largely capital And remains business the the to unchanged.We this for and to value allocation level, expect that flow our year. free

liquidity. And paydown. bolstering debt will We to the be focused recovers, our on as resume market look we'll also

opportunities space. will key continue we finally, our developments call, dividend.And back as We And we're Currently, earth now to our will market prepared comments. the as over keep the we operator focusing facilitate. evaluate portion so any move arise. Q&A of updated the We'll on to rare concludes to prioritize to they continue hand on call arise.That will Operator? strategic high-growth the the our I'll they to

Operator

Begleiter David at first Instructions] be question. will Deutsche [Operator that your from moment for And One Bank.

David Begleiter

were back the the higher exports at things in it March. level driving year? to forecast much elevated of a are prices And it a your is half in Chinese Is John, how of that? concern the sustainable? What for

John Romano

numbers were Yes. March David. Thanks, significant. Look, the

move. but really with look consistent in saw volumes would compare we say our numbers February they to March, was and Chinese you with being not significant, down, it were what February significant That QX, If were Year. I and New for February at QX said, a

Now at there's into what inventory. on around you're some of expect antidumping. And what's there would looking out Again, a China, imports lot happening Europe. discussion some of of is exports I not part of repositioning is going

higher, with something moved had So also -- probably there's to I with I do there. element There's to being think March from significantly an March, think delays. shipping February that

maybe no in see up. questions a tons, volumes look if I maybe -- part saw moving quarter what that first happen higher think that of the year. XXX,XXX-ish we the part it with bump are something the than you'll So quarter in in I of first dumping. volume the in last third repositioning at anticipation be was quarter. you year, But of But the might was number later that Again, think normally might the that for

David Begleiter

is And be in case, And that customer antidumping the antidumping you yet Europe so, buying it any you're to these expect enacted? provisional to earlier? change there do in investigations? QX on just due if And or seeing is duties behavior

John Romano

Yes.

presuppose indication I'd but go going going June, at duties into to So to look, it's the that early say should there's not latest duties maybe think July. I I'm end happen, of sometime -- happen an what's clearly place, provisional if

is going investigation investigation So X to weeks, Brazil. X there's EU been that, in the an there's in other X to that X launched, happen. And the assumption addition last India formal in in and

in to ought in be numbers some some kind lot we a there positioning? the tell to of to forecast, visibility second of dumping. think actual stage. get moving be hard dumping a possible. this our of move parts lots It's not better I in really at of the through as we quarter, It's last this with to that don't regards volume the moving imposed of mentioned before that. duties quarter. Could balance And to there's we be of because So duties call, or there's of imposed lot on our end we expect When as the provisional

David Begleiter

John will BMO from Capital Markets. be at question McNulty Next

John McNulty

utilization lot stronger. rates, of a So, the asset obviously in terms

some rates much you've what think relative are the It fixed can cited there. of a improvement give assumptions had I be to I for us you terms I about kind guess, thinking in utilization ability may calibrate give we how And guess us how as might $XX just think you million, change reduction as maybe more cost I through that you seen? that we at or of absorption. should year? the there in some progress be ahead

John Romano

Yes.

those lower I instances, And utilization and what's months, we're X on think from quarter John, the was is from regards But at to a to happening, clear do the low XX%. volume. we period were coming it's on those a from, up. stage, of where had average, recovery, coming guess we what's that we very year plants last some believe right? In that's up that. averaged we of end that over I back We're happening. than in the of at capacity -- XX%. about talking about XX that, base. over X would happening are strong and pretty a a where -- recovery creeping XX-month of have of our pretty We why were So and -- pigment lot this inputs the the our started around the about we're We of year, plants ramping we last it of XX%, for standpoint saw kind say talk front end that some with of north indicative I across

because that end maybe through are we the the high-cost more to little moving bit running work to said a take than was the quicker. that we're inventory quarter towards going that of thought, volumes through a And quicker of some we second

We're on at to XX% much run which evaluate Running thing it's going continue how now at difficult running consistent. we'll a to average rate is to a more do. So assets. the we're assets

the we downtime that a we we're assets So we're rate. at is much believe had But running rates, up. now, at of right running back rates the believe lot running we're more reliable A to going still from at bringing we happen at again. lower don't those

our things process, how you market still the ore we the integrated which mirror. are And continue how in that of adjust to our we'll depending rearview did a John, But as in it upon some to through are also evolve. the production we have those continues upside comment? factors our planning does, business manage blends. some So have

John Srivisal

last you said ramping John was I going say, before, year. in as just we've to as we up of QX mentioned, -- did start Yes,

through. And so X our takes just given it chain, to integrated months vertically X flow to

And So QX. that big inventory portion saw in through we -- QX. that higher expect a the of to cost by through go lower you work then

saw to not You'll see close pretty quite but probably you significant the in level. as same level that and QX,

John McNulty

Got it.

Okay. return in patterns demand look for from the half? as more little less maybe seasonal really second like helpful does coming of usual then the are assume, it And down we and a could back uptick -- it color. this so kind as Or normalized thinking the back as No, about usual seasonal I a follow-up, into it of the a guess year? better point, at guess does be XQ or volumes we in Should are both to the in a I kind we TiOX than half the go that's how you into of go level? XQ,

John Romano

Yes.

over we say year. then COVID. mean, last different and guided XX% of a QX. quarters that's the I X% X to years had would the the depends increase the in on it course from And lot recovery to a of COVID second -- with We've I So

say not So the that's little very I side. higher abnormal, bit on maybe would a

third So order we're although you'd inventory like. Typically, well. early QX you'd what and visibility built typically build the market, depending kind to it's quarter in, for in the in little getting that in book being a as a cycle. going some you And QX what's you in see in first a are then in see being quarter, quarter. third and bit of consume that year determine happen to exactly upon slightly you what inventory instances, you're lower, already inventory in could us a on But where normal QX looks

that bit the I'm happen have -- now predictions any on volumes. to a right on and we're antidumping, little similar quarter looking in expect early. what's again, And huge but stress a the the on it third could if would what So, impact based imposed, not But to to it's be not see, uptick giving duties again, are if. too word somewhat an going we're to I expecting I

Operator

question Fischer will at from And Sachs. be Duffy your Goldman next

Patrick Fischer

Can you major the can walk Europe, on through QX you on at some how and between will When U.S. geographies? your volume, give that you Asia? and price look vary the color us both guide,

John Romano

Duffy. Yes,

when in look, about where saw think last quarters. we saw, over the So the first every call, in And reductions the we quarter, region. as say, in further growth we mentioned I'd we disproportional the I X areas growth had

Africa, side. the Middle a on Asia was Pacific Europe, So bit higher East, growth

Moving into coating see to season normally for starting our the what project we build. in would quarter first QX, we're

the little America. pick starting push see So green that with between an we're and say QX in But difference Europe, a of Asia more seeing I'd East, in the still as hemisphere getting that seeing more Middle to well. say in is getting coating indicative in more we're as in bit second We're what's season well I'd but first some we're America the North North Brazil. America starting is North increases in Pacific picking up Americas see northern a pretty quarter. and Africa we're to and in seeing But quarter, in didn't Not a shoots up. bit QX the growth say to growth. growth consistent we But volumes

Patrick Fischer

comes net ratio, better. if you've down debt talked pay should get we to at actually about obviously How debt moving then repair down how And your how much here? debt look you pay wanting about from that that just from think much of you EBITDA gross Okay. higher or want versus to

John Romano

maybe get I'll net still start billion goal debt. We let it's $X.X billion. with depending talk what talk John goal to about. I'll to to still get to billion or $X upon have And is, about gross and So a our we -- $X.X

John Srivisal

obviously debt, down relating generating think is to leverage, which or I And you the obviously at net it paying it's if either Yes. cash. look debt

the I bolster mentioned, expect think in comments, significant we QX year. hang his pay as market, year was will do as John debt. we down end we flow through this for to a look mentioned the then and cash of the use. on free positive But liquidity

a producing So the much amount if we will be our through to better year, EBITDA QX, expect in we year. $XXX land. of help we million, look which will pretty at of we take do early second post -- million significant secondly, And guide are year-over-year, on X to a was last even the of free you where will that second goal flow But of XXXX as easy of depending pretty start quarters $XXX half a the we cash that as beat the able half metric. the

of and going forward. our we this go do So the rest expect that net leverage will ratio down pretty through significantly year

Patrick Fischer

through it want my Would today? of EBITDA LTM go use LTM trough which But floating time, have at we will question. a be I behind sit as EBITDA just of we was the kind it? you you want higher you kind to as the ratio? to the number baseline look when What's to that that is going of the guess use Or

John Srivisal

Yes, definitely the higher level.

John Romano

latter. the Yes,

Operator

at John Next Spector be UBS. question will from

Joshua Spector

of that I wanted do the any that to locked or if permanent extent you a as quarter gains in benefited view of share your competitor and And your ask the transitory? in any you is more or contracts you've not. shift for maybe think the they to that view down did volumes that first didn't, outages Tronox from or

John Romano

Hey, Josh.

assets strength of Canal. Sea strength the has continents I Panama and to having we footprint, the where we closer starting There's believe with respond our located of were far on saw do to as green what the quarter, that we So look, when I able of were demand as shoots guess, saw I or we of anticipation -- X the and lot a issues of our to ramped in that comment to Red the of our made up in our the because footprint with that assets lot to fourth improve global customers. global a

we able the of that into I call if to I wouldn't So that forward, continuing how we're I is is to a early that gain. answer we're that what second not I growth positioned? quarter. yes. would to were there indicated moving see volume call able share I think pickup. to because we respond made the some to about reference of to when exactly sure the think that signs would respond And that expect as the we being I'm that

There a our our were lot was volumes. that in there the growth So of things demand. playing were into

had supply So chain through you the worked had demand, the basically -- inventory. you had all

So a able And normal pattern. that back I'd from was of customers come to the of, the just we're a in uptick sold we're in demand first position that our because, being I order volume getting saw we buying there and say, global that to our every into little the as in bit quarter. to all respond did regions mentioned, supplying in an region we

Patrick Fischer

Okay. cost Appreciate that. to side. And on ask I wanted the

the $XXX I that impact, million clearly the sequential plus, earlier, mean, John, operating a guys back improvements I it was year pretty the expect. But minus I I you look you it if on was cost negative So year think, before. mentioned and guess ago,

we years be with of helping take little of trying rates? the next years? mine? as the Is a So couple is frame some that how operating of in next the recover Just look can projects would longer Or any CapEx helpful. you layers over that the bit higher of term over to that around just that related couple

John Srivisal

mentioned, higher the the will should Yes. QX. by And I see end rates, obviously production as see, you think and of we we that

have the volumes think million raw we I from increase look couple years $XXX if biggest to constant the up is general at over you currency. been XXXX we've materials over of up had XXXX were past Additionally, that in constant

So haven't the of we about in lowering XXXX. quite seen there X% cost

expect We digits high in single XXXX.

we those it's unsustainable -- that those even So do levels, expect at costs.

not that, XXXX. to expect do in we So but see likely

Operator

be Research. Next question at Frank will Fermium from Mitsch

Frank Mitsch

little more raise. I to beat want fixed issues. production absorption level Congrats into and on cost the a down drill bit the

a negative in $XXX over this You was that of XXXX. indicated million

to $XXX fair to, those up that all assume start as million XXXX? off else that over So, EBITDA be and should think about the we in absent it you're XXXX given costs, is equal

John Srivisal

statement. fair a that's Yes,

John Romano

math. Suitable

Frank Mitsch

Okay. the you I pricing side, suspect, given the it uptick the raise, on I And indicated expectations geographic the comment and slight Fantastic. versus XQ anticipate appreciate all beat XQ. But obviously I Street in a said, that? you here get to respect then much Street not you will is that there. the as because with there. Can on at

John Romano

Frank. Yes,

we're starting we in Europe, see the of market the last Latin spending so strongest, see in the bit saw to I So recover the where the worth Pacific, areas Africa, decline that's X takes and little a that's I'd where some, East, probably to progress It out a volumes, Middle Asia little of America, starting biggest where say, over price. some bit we're for on think of it's there on a time And pricing. time There's about. lot pricing. quarters, announcements talking of

kind you of normally wouldn't time any the quarter. the see we first in that first that's the quarter, So market pickup a and saw in rebounds, what

actually So of we're was startings It again, of to little through. recovering. saw indicative time a roll what takes for pricing bit the we that

inventories announcements, people to before utilization pricing takes needs through. make to Typically, time a and for implemented. those when certain get point need actually to place a announcements So get to to certain starts before move to get capacity

Asia time of making half into move comes once get some mix. price questions other starting about we those of wasn't to it was East was we're what in Europe, why as down progress. quarter. the takes and of But in down. pricing get bit Pacific, to thought, Africa. lot progress. the we're are we the And start Middle So It little doesn't with the make progress we'll typically X% in where regions. That got volume the Again, said, I happen like largely traction And year, Latin second areas And first a our along. overnight. that's just a to and we that line America,

because those to we make quarter negotiated second pricing. half we that evaluate we've where why progress to That's But is good those get increases. are the already for reference we So have the feel the evolve, a market continuing continue on a we how slight we'll into increase. to made as we kind second and of on

Frank Mitsch

Leithead at be Barclays. Next from question will Mike

Michael Leithead

something Dollar high-cost decreased mentioned have And just on question sequentially XX% or the I of you maybe volumes improved sequentially. recently through inventory and maybe you inventory. for CFO like John, a one John X% burned sales lot your inventory.

have declined would more. I So inventories have thought would

you help So can explain that?

John Srivisal

Yes. I quarter this mean we build that's see in a there. Obviously be a of it. did great seasonality question inventory which lower, would normal

balance. account looking from to we integrated also at are look But in balance to a have you ending take -- vertically So you overall to have that a ending supplier. versus take

zircon it's not mining obviously which It's not pigment just very it well. of robust. it's So also the were as side just inventory, inventory,

to did we Secondly, significant $XXX the down, our have of of years. some increase books but still you pretty the cost the over come carry million relating couple on past mention costs

that costs So build the Frankly, a recover we we portion I that's that change. do when go driving expect $XXX see think do down, what's that. time. But good million over input ultimately, of will will it's we

just robust Additionally, cash. half XXXX, of commercial that like into we turn saw once second year, will see the more the inventory we in in

If reference, a million you we free at 'XX generate $XXX flow. as did of cash look

So is there potential the in flow potential, business. cash earnings the

John Romano

TiOX. the we specifically was down, that that up on mean, And we I said inventory ramping drew Atlas now. we're on

our mixture it's things. so I we don't down. we've inventory, to the that inventory, TiOX as go inventory got whole key of So we've ilmenite we've is, point, of down, natural point as is I iron goes think slag a costs rutile, the it's inventory, have got John's think John's inventory, -- pig And only cost got

days rest down of a there's and expect inventory go to So year. -- value element the and continue a that throughout it's that we there's the of then also to of not inventory,

John Srivisal

other have And we Jazan. the contract note to with obviously a thing do is,

buying feedstock are feedstock. we our So and building that inventory is of

Operator

be Global. Alembic will question Next Ahmed from Hassan at

Hassan Ahmed

the on guidance. Question

guys million range is guidance in in million QX. obviously the And reported EBITDA to for QX. $XXX $XXX million You $XXX

at sort the guiding in $XXX around from half are So million of they momentum is the commentary better consensus million. developing, taking your QX far earnings to roughly numbers, a of And seems all mean, yet, it $XXX back look and right? year. should slightly look guidance, take I And half. the you're shy of that first midpoint I than So first half the the of

I thinking beatable. mean highly about seems the that way me to is fair of XXXX? which So

John Romano

question got with If Yes, we Frank. asked. it's another that you kind the comments way to that the you're But reasonable, Frank shy right? just -- doubled interesting number ask of still you look, of your I confirmed are think XXX,

supposed through. as your And talk got I've you that. comments not because consensus did I are accurate. that So upside we've how Jennifer move to referenced some -- I'm me about we to do tells all think but

Hassan Ahmed

sort just again, of deeper into And fantastic. a that. little digging Fantastic,

absorption XX% $XX sort How an being much half much You rates going about above is back does being an year, offset like? the QX? in to of about as guys of now, was fixed that be what QX? how in it last And move of talking a penalty you sort penalty So to sort offset your cost million were look million operating talked operating up rates of of right? $XX and

John Romano

provide we to continue expect rate. the back running at going But not would we're I half yet. So if this

the numbers gave through kind you to work $XX of numbers higher. we right? that think was in quarter, $XX quarters was where to that. $XX first year, last we but But to $XX those kind the there were have John work because wasn't quarter. of million million how about through -- It said a It million let about I'll So million number you

might John, -- So you

John Srivisal

in changes, said the $XX versus or and was then $XX we favorable were mean market about $XX QX, costs idle Botlek cost million million higher from QX absorption production from million, and million I $XX lower mining.

on we amount, Q&A a that and a amount, then expect million not recently, so, or QX. amount take similar the you similar answer do but if So a look quite $XX in at the we did

you that, take additional it's at if this $XX So to we've million a quoted. that look

already and amount through that will QX. you're a good continue seeing QX So of it, and

why the that to we from million that to that's million running said expect at lower $XX through recover we QX. So $XX

John Romano

but not we're end yet of it, we've full got so, we where seeing a at mean, again, because, And respond as continue. we're at recovery demand not improvement capacity front I we're capacity the see some running further we're the -- to recovery, still to the rate on we're

good recovery. of progression, So of we're the say we've real come saw end indicator about continuing XXXX fourth and finally there quarter off front of was a -- of and been we slow it bottom, was, the forever XXXX we was seen talking we've the to what would some a is

the of to year, the continue kind through we is move rest as unknown. we'll that. China So evaluate still an of

not recovers, you'll only see impact if So as on but zircon China TiOX to start on well.

Operator

from question be Zekauskas at JPMorgan. Jeffrey Next will

Jeffrey Zekauskas

the Sherwin-Williams, and a PPG they look at take When step in TiOX. they you have or a what commentary they're States, the maybe maybe little markets of the the didn't coatings Europe, say they shrank plenty is they that grow first listen when you bit. to markets back you in of and United And in And the coatings quarter, flat.

where and inventories pushes? so growth, at How market to coatings TiOX growth So do look with higher come is simply off when lower the it did assess because pulls rate fall a end restocking just volume different than your much those you you of it volume why from? And growth isn't rate. the

John Romano

Thanks, Jeff.

I where the months, go wind 'XX, and think 'XX to volumes each clock XX% right? to XX last you dropped to let's So back year. got the back the

So sustainable that over either. didn't of volume. you not that our XX% a coatings of XX-month period we companies. And those all lost hear reduction of from kind That's

a So the of there about is that that an in was we effect. element destocking tremendous amount talked inventory chain supply of the

we We're levels, now was just that were to To of XXXX back we're get to weren't back in. not out 'XX to lot boom getting a yet. a the are buying TiOX home, was products in at products were they destocking, our people and where and patterns. for of to So reasons 'XX because normal it year staying going for using were industry they part

suggesting over we're back X not But what last we're the we saw 'XX either. going get volumes. to years So wasn't sustainable to

drop just patterns. can basis. Now significant on we're XX% where back as to away an There would TiOX, to no getting demand of the been replacement just refer normal we for has what more annualized buying

in you a feeding has bloated of which lot been buying has the upticks think growth but normal starting just is now And that speaking our and not regards through to to customers, and supply we're who growth, I'm back to chain, to demand. all speak been to with of depleted going and we're inventory So them. about getting when to what with or patterns that supplying see you're

Operator

Stanley. will question Next at Morgan Andrews from be Vincent

Turner Hinrichs

how rates on Vincent. region? by some you balance and Hinrichs for industry could supply has operating on wondering Turner additional is color demand if the I'm trended This provide and

John Romano

the So everybody for comment on gave We on really an to hard on to doing. is indication -- recover. rates, as market recovers, and to going looking everybody expect, at they're demand else start to their we're we as you what to how it's would I us going where operating were. -- operating And how not is industry the respond continues rates comment going at

Or demand? second just to of could So the was it with you part -- regional question, regards your --

Turner Hinrichs

Supply demand and balance.

John Romano

Yes.

a global is TiOX So look, market.

Europe, the the for this big recovery having to assets was global a months capture quarters has part TiOX China us significantly. last more on kind season. the it's ability been X seeing side those that exception, the and front as and But in supply growth pretty as far see as say, a still demand years our because stronger environment over that. further this as we X we're our closer maybe China quarter, customers. of down to starting our So has of Those to East, a about bit difficult more -- difficult rebound coating quarters, been But everything base course identify the and normal last side, a inputs when to on mentioned, little is of everywhere the little supply were goes. there's a see, over first I of reference, and the of bit to poised market. think footprint our lower around and that to that's the The going of ship mentioned, exports in of geopolitical more. freely that's But material better obviously the last seeing and But what growth we as we're in the Latin goes would growth I been course I bit we're I probably flows end why our considering Middle starting demand, over the demand the We're normal in a made but stage. XX puts quarter, with globally, quarter seeing And last from more the areas normally second in regions. capacity. a at in America, that impacted recovery second demand bit far demand then a North muted. predominantly takes X we're a would regards from with see over as the in America, as

as demand to North in America impact well. starting us is So

Turner Hinrichs

all the color. Great. Great. Appreciate additional

And of this been trends. of higher global have an flows that if don't freight also sounds would interest. this it far of to well trade perhaps mind just update like improvement year, you providing some so quarter, confirm, to selling due be been how as there's Just local-for-local

John Romano

-- flows, global an trade, Global on well, there's ahead. look, been trade impact but go

Turner Hinrichs

imports figures Yes. Any additional or regions my just March exports and what you're out sort since in question of selling? other updates like high exports considering like Chinese on seeing local-for-local of on

John Romano

Yes.

into Europe. clearly, And So align exports has the going on out again, with bump of China. exports. there big that's in a been March don't actually imports Those

that but been might to move country has has been is Panama in ability So it's probably Sea what's on impact time material dumping. Canal. on and going happening material for Red my prepositioned be opinion and the an on from in in that one anticipation another company's There warehouses based to what to impacted, some move on the bonded of the

demand. and assets the our do saying So footprint location the of again, not the the than to of our probably to because to not quicker Sea impacted globally. allows respond they it's global as I'm less we impact Panama impacts Canal us we competitors. impact But And that downs because take us inventory being do Red in because have to ship the positioned no much. have us balance of our advantage allows to and of ups of us

Operator

be next question [Operator America. Roger your Bank Spitz at from Instructions] And will of

Roger Spitz

XXXX December you're is is -- cost of XXXX component December It down X,XXX. in to in numbers, you was to the And 'XX through? where X,XXX both flow how and Should how higher slower, have XXXX your be you EBITDA about to kind then we And level So 'XX volumes working 'XX in when questions inventory of working costs production say the the running normalized a inventory. of there? also and have going cost was from be be thinking the like to inventory, and in I inventory the the number like Or X,XXX, was from large related high excess the in and that is by X,XXX. costs inflow And sounds so you December cost being then should fixed high cash X,XXX, unabsorbed working prices, and a expecting think round clear, excess we driven am your capital that about of that that, capital 'XX just correct excess of from was work XXXX? inflow think is the sort that? once inventory much in through that December this sort

John Romano

value, about much XXXX, we than had the forget you've a inventory on to one it, were we perspective, comfortable make days doing just where was was about because and ran that me below what where TiOX In so on peaked. inventory our be. lower got we operating and inventory we're of comment. we at We got where Let think things from zircon that normally side, produced. way the comfortably would normally over We above locations tons XXX,XXX when through we're our inventory where

things, So of One what and is inventory -- that where there's then value. far on as does as regards John normalized kind a normalized and to mean X this. with answer based I'll let volume

John Srivisal

Yes.

that's right. exactly And so

produce in XXXX point. pretty obviously at everything had that sold much we So we could

low values at inventory. were we So of

So a well our safety did rebuild normalized We I as inventory wouldn't take our XXXX to level. as stock as there. have

next the million. $XXX over years, cost XXXX, mentioned, couple significant as of from see we across did So increase starting I

some a albeit in did would that we to you amount actually So 'XX have contracts. significant back, expect of pretty get favorable

we costs, So replacing the again, that higher -- cost did sales the QX, we selling $XXX to some volume from back. But in Roger, But mentioned, higher expect see had the the we other I wouldn't of million have inventory, as was, our full expected. are right, lower benefit the we come than did higher you it inventory. with lowering thing

of of a And so put in -- some way, that the amount an QX. the cash good beat, drive if inventory it did flow will, you perspective that from

Roger Spitz

in your focus the what which million XXXX, it historical as numbers, Which an at is that? it Or an million in that there's the Of should calling includes of you extra $XXX excess flow on it. of X,XXX run the $XXX when get will inventory extra excess looking inventory. think we -- about is feels cash I'm number we like out Got the through? that cash inventory in cost, that

John Srivisal

-- Yes

John Romano

million. $XXX a of North

John Srivisal

will it -- well $XXX depend. be Yes, Frankly, will of It million. $XXX million. north yes, north

I do turn, -- recovery that think normalized ultimately, selling how more and of ultimately it of And raw of revert big levels. a down materials depends the you production secondly, your because part inventory scope in costs back if excess if how levels. will on turn the size is significant it does it that to and depend

John Romano

get time, that suggesting that. $XXX but longer going to of north we be in million be It's we're to of over And able recover a going to XXXX. not period we're of should

Operator

have Please time, And questions. at we proceed, Romano, this Mr. no sir. further

John Romano

value Look, thank us to advantage about competitive that strategy, a and very today. joining integration our continue as will length, the you, Well, kind talked optimistic potential Okay. confident that sustainable long-term provide thank we've for and for you at for Tronox. referring all vertical we're through short, continue we Tronox mining the create we're and our what to leading We're of solutions. about and medium upgrading the as to

we with and support interest a Have that, great time, and appreciate day. thank So for you in your your Tronox.

Operator

thank again, this attending. rest you, that this ask please at do conference lines. Once the does you Ladies gentlemen, we disconnect your and time, your your call conclude today. indeed Enjoy day. you And of Thank for for sir.

Tronox (TROX) 2 May 242024 Q1 Earnings call transcript