CINR - Earnings call transcript Q1 2019

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Operator

Welcome to Ciner Resources First Quarter 2019 Earnings Conference Call and Webcast. Hosting the call today from Ciner Resources is Mr. Kirk Milling, Chief Executive Officer. He is joined by Mr. Ed Freydel, VP of Finance; and Mr. Planning Financial Senior Bhakuni, Analyst. Vivek being Today's call is recorded. been this open mode listen-only all for have time, participants placed and questions, the in following At your presentation. the floor will is the It [Operator to my Vivek to turn Instructions] Bhakuni. floor now over pleasure

may You begin.

Vivek Bhakuni

morning. highlights Laurie. for you related performance. VP discuss Freydel, from first the Good discuss our CEO, of joining Kirk our then details XXXX quarter's to earnings. the Thank and Milling, to provide Finance, will our Kirk Thank outlook you, our us quarter rest financials, discuss additional will XXXX. some of our Ed will for

will questions. We your take then

measures. we Before pro the more financial are the the detail are earnings to by which these call would conference therefore company's this constitute in in turn you found I remind during forward-looking number are SEC press financial Kirk. comments statements. discussed for results call over that suggested of a may discussed our to of filings. from the release. financial will begin, Actual and reasons, in included forma, can materially measures today's I comments be in Reconciliations now those call results considered Certain like differ non-GAAP measures non-GAAP

Kirk Milling

diligent a their which environment. soda from morning all of is momentum produced production Vivek, a remaining our had XXXX earnings record a ash, Ciner tons did quarter quarter maintaining safe commitment Thanks, our with call. approximately good everyone. positive Resources fourth and XXXX. it record, We maintaining XXXX, great XXX,XXX to first the while to work and team Welcome first We the quarter start in to

and to as X.X% our to us our X% improving increase months prior reliability last volume sold sales improvement of our we by continuing over in results. to expectations investments X% our production ore over in well grade improvement production, by These through volume are initiatives grow evidenced in quarter records allowed maintain our the and show in and six as XXXX. the to year, continuous As

Turning domestic rest been with we supply international most markets price there and XXXX. to continued due X%. to regions. has pricing strong to the realize markets, XX% of for up international international tight is in almost good both the across International domestic better-than-expected continue up We foundation pricing market, results a believe strength almost and for

X% lower light in product later certain revaluating growth of I plan quarter XX.X%, our were announced driven also about and we higher speak to which increased by driven expect call. the on price to expenditures expenditures by and distributable grow to result, cash, we impact a the beginning revised reflect momentum to our international year in have service XXX,XXX As the X% domestic updated X% our in volume in project, by the our our We've the quarter to prices X%. guidance to cash project third of this sold were expenditures versus related outlook initial reflected Co-gen marketplace, decrease on capital with Roughly, in be flow in previous particularly domestic to QX. anticipate quarter. The Co-generation million this XXX,XXX expenditures XXX,XXX by in The by by we maintenance heavy XXX,XXX consumption tons cash investment quarter compared $XX projects of a in XX% in in QX. full to lower tons, to newly capital in based the of the level what results of represents will our first estimate to in Overall, also in project. quarter realized the and our

our financial detail. results Now who over I am Ed call more going to to turn share the in will

Ed Freydel

in metrics compared your our some program use for February. the around I how key will Ciner first provided discuss quarter Today, spending some detail provide Kirk. thanks interest results and significant including back and quarter financial Resources. And drivers the we in from everyone will manage you, those to business. capital Thank continued outlook some I we our

Let versus outlook. full-year me recap our start our of actual a results with

total on As XXX,XXX a tons to we QX Kirk to we quarter volume will to operating increased for the sold recent of XXXX. the volume our in in X% compared believe continue full X.X% mentioned, to X% performance, see Based year. production

XXX,XXX decreased is QX to tons an less volume basis sales than compared XXX domestic Our our annualized of which by to on XX,XXX tons. XXXX, forecast approximately

for So the volume tons. of to we XXX,XXX decrease in outlook to XXX,XXX a domestic revised our range

higher Our domestic mix. better of prices price sales a sales combination from increased and XX% by almost

continue X% X% which last causing now for to year X%, we a year, price to of up was X% the throughout And international we for full to our quarter-over-quarter. as forecast up continued revised increase is X% X% the year. increase. our maintain result, to as X% outlook realized to improvement. to from anticipated Pricing quarter-over-quarter For almost full International pricing a compared lower the the year our increase

the to of $XXX.X X.X% for up million offset market. margin X.X% in the were decision Our to $XX.X in XX.X% was QX the the of increase prices. compared domestic soda international XXXX $XX.X million the volume of two ash average the ship driven sales customers first The as revenues Domestic increased due quarter in decrease X.X% a more price strategic increase to sales of part as favorable volumes domestic increase by in to increase to by million low X.X% in X.X% partially sales by International compared drivers. volume compared to from in XXXX The sales sold. XXXX. to of primary of quarter were as an quarter $XX.X down QX quarter was million, in well

conditions. by variable volumes product as shifted volume and a year as $X.X volume increased plant of including we gas First, production than colder The discussions to and gas the to in driven sold increase of million prices a well production $X.X were to sold increased expenses. the legal increased disruptions during freight of higher in from increase to higher usual contract $XX.X we freight costs million was month natural surrounding than natural due project $XX.X X.X% the expenses experienced XXXX. of quarter SG&A in region as regarding in from pricing Cost in February weather and compared million levels QX to due supply ongoing increases had higher negotiations as we the second, prior our and XX.X% exit spend domestic related driven quarter primarily the Co-generation by million our an And market. that in ANSAC. realized spike

soda Turkish We also incurred our to ash the Eastern related startup importation some seaboard. affiliate's into cost

balance increasing by million that expenditures sheet credit From of as more funding ratio increased profile X.X than expense million $XX.X leverage first the $XX.X decrease offset benefits. as Cash cash cost, relationship which timing co-generation our project have million operations the on XXXX. quarter the quarter. times from first We of $XX.X $X.X quarter on was our debt lowered driven in SG&A increased an annual uses with of affiliate benefit provided conservative already with onetime revolver facility. a a this the in seen to in Cash XXXX to ANSAC, commissions perspective, quarter a was basis. the in maintain of supported of to by primarily operations as in through levels The calculated borrowings $XX.X quarter. sales net were compared by of of we continue the primarily incremental million well investment per These due which to by to million pension the cash in capital also is in the provided

EBITDA results QX and these In into monitor discuss how translate delivered largely key to up million to pricing Next, XXXX, in cash let's to distributable adjusted EBITDA due turn XXXX flow. realized we metrics of MLP, the compared of an QX as adjusted we improvements. two XX% $XX.X as

flow of maintenance million the million compared was net in the cash were costs distributable higher by to cash quarter cash XXXX interest Our offset quarter as $XX.X first expenses. in $XX.X lower

Our coverage in X.XX quarter also found Much this ratio information on revised investor the presentation. in can per be revised of our quarter distribution. $X.XX the based was

outlook to our Now let call and over expansion me comments strategy. and regarding turn details plans more on back Kirk funding some our for the

Kirk Milling

Ed. Thanks,

necessary largest natural a taken the debt to we XXXX an are opportunities the Not future our soda As drivers we ahead, strong ash for results, year as very be and producer. fundamental we're lightly Resources. investing steps growth demand performance growing fund meet operating to The over ash anticipating to a distribution reduce Ciner long-term. opportunity continue Wyoming. us allow decision financial only about to also to soda see take and but not in the us part industry world's look and be balanced both and current our our cash to to it for operating we the of Ciner's These future excited led for international will use of growth to approach was the flow begin leadership in have

investment. million our that infrastructure by increase Wyoming entail an project designed with capital for We $XXX been new expansion capital require some our of higher will in are incurred still up plans on working projects years. expansion project have Co-gen combined when could recent expenditures believe our Ciner to capital than materially the We and approved other finalizing overall to efficiency

We ash factors of our feedstock currently change equivalent. one soda XXX,XXX have ponds approach. tons Number several DECA a of driving provide our around in

beginning existing goal are two believe purging best believe time. refining ponds at feed the production can we what million increasing to and number and trona continue our depleting However over that comfortable improving for we rates from we're we DECA longer be year de-bottleneck X organic DECA sustainable our production We least XXX,XXX to in no XXXX sustain of year. XXX,XXX will and tons are we is achieving rate the tons our faster Therefore, than per strategy from process. our new facility per the

million with Co-gen scheduled this yield later as previously far communicated year the we've of for returns, project As $XX year. to cost per $X should investment million savings startups

we should expansion early While equal our technology. be confident existing advantage we asset fixed costs margins or in base it our and very take than as project are better of to EBITDA facility timeline, the production leverage modern is

a these business committed conservative maintaining through to In with structure for in to capital projects, and terms investment of the part pay debt. part means cash by funding policy which are a generated intend financial the through disciplined we in we

level XX intend distribution performance. As for this a the to we maintain cash depending to the and XX proactively the at business next quarters upon made result, to distributions lower decision our

maintenance our a partner, the very be business for please we that in our and we to leverage profile we executing is line regardless increased period to to production and ratable initiatives cash conservative available years. and to our reinvest are operations over ourselves supportive in can at facility a to future our materially meaningful questions. at we for goal thought. open absent on you ash flow will Afterward, up pricing pricing. better the In has investments to originally invest better for soda improvement Laurie, QX a as X.X X.X of cash concludes shaping we our excited improve remarks. ratio investment Ciner us. closing, of our is continued available Resources. great And the prudent Thank for way growth position the long-term number us again interest been growing forward are This coverage a off in about our resume than continuous of believe distributions leading Ciner this your start for to facility. International a Resources With be in Our allow whereby normalized to which and our prepared to in reliability look from improvement general throughout stage times. got maintain maintained a we levels opportunities new

Operator

question from first Jester Daniel of line Thank you. Our comes [Operator of the Citi. Instructions]

Daniel Jester

Yes, hi. everyone. morning, Good

Kirk Milling

morning, Dan. Good

Ed Freydel

Morning, Dan.

Daniel Jester

Just at things Is be the I you. looking the wondering the would is of appreciate it sort on of in you below are into Thank the So, I investments types exactly any above detail types project. make. can helpful. expansion very on was maybe a bit the you little of initial you trying to if of color grounds, going to be more are color what grounds? go just terms additional

Kirk Milling

Sure.

now, are a organic considering is right Dan, new what project. we So, completely

it's will in be think have So, to would closer that ore -- to are the new new But, the And entail to up increase X de-bottlenecking. year. around decline year X About X so experience to consumption to in surface a a likely about DECA not a tons to a the our XX% offset is million we XX% moment consumption at tons be we contemplating will million the will X of likely up that's we again, by underground. line. and Most We next tons. going from years. the looks be it a shaft, would the on will because rates probably million investment

Daniel Jester

with Got you. project to and sort -- the plan ANSAC? weren't away quality But, to the about you seem quality And does to and that. for instead impacted all so, had year or that seeing distributor deciding a are fixed going this and addition then challenges you better de-bottlenecking become ore depletion? And from driven you you the DECA recent as sufficient at has ore out some that of of in the was is impetus do volumes. it which a by in and ore bigger the you mine have bigger, grade quality to move mostly have in to Or, just trying looking going

Kirk Milling

all combination above. of I think the of mean little it's I a

its impact start ore I the we grade. more you the our to variations push grade reliability the that we ore makes us it what much also to as overall push limits, to are think As of but years X% of production plant de-bottleneck And fairly saw over continue have just last plant question. in into couple the the significant plant on try sensitive to began overall from that's and the and to starting just we come change in to a output with

million roll I hitting of kept range, de-bottleneck, So to you just kind we of trying when we together seemed were think in it once while seemed that like we X.X ceiling. it X.X hit to all that ton

to seem when you then not with and sustainable combine what I that, we so, just the ton, of did a way million would of any need DECA X knowing future it overcome call, be that there And to rate. feasible achieving

been with us all what new want of So we project. to going we therefore, equipments we be leading at additional trying in lines think to And going is play. to and it. invest have return kind various if the best then, achieve are up iterations the looking to new that's have to to in we And what's come

finished close. is since So clearly are a getting significantly project, new I to than amount we to what we our doing be know it's de-bottlenecking mean but be have capital still evaluations, more And not going we're organic going we with standpoint. been the from of

Daniel Jester

markets, I the talk sales though about additional U.S.? leaching in bit market there ago can And XXX,XXX going that a years maybe turning I you. is remarks some to on of then couple what's about Thank and of and U.S. know the towards you. Got prepared the you a profile year decided talked of in your in This you the know share some U.S. little win you I volumes mix about of think in more in U.S. is tons away the the

more it two, a to the that bit U.S. relative volatility competitive So, year in can been over market, on U.S., more seems prior become the just you or specifically? maybe like last the a comment there's it just has to

Kirk Milling

in strategy some the, up arrangements wasn't some the pricing we acquired I to and had the really lower-end of would at contractual that had but It the give prior our share call, what just market, year, some prices. and international going rising you Yes. competitive

overall planned, prices market, combination of average we off also our the at of you and bottom And the what so, of -- up market, was than in had end a the so, we when of most some they're what year-on-year the realized look lopped it became bottom rose. higher but and the market, as gave overall, of rising domestic that's we at just have our prices

higher seeing market intent say us decided domestic on the the the difference too than is to why maintain it. be we is started but market of a where some which international share we little today, the up, for I we So, what between would in are were to pass to probably to our domestic great and pass

Daniel Jester

on just exactly me what your low about in you. $X one bit quarter, you trend, one the last little a very limiting quarter? into just And maybe the was then dive that's so relative first Thank generation to in from deeper cash Okay. operation under from the cash million can

Ed Freydel

up lot for flow Yes. capital the payments capital get from a We operations that is in Ed. increasing a of stock, With of cash aide This saw delayed had a working working in change we lot bit little their sales change operations. increased. and as

So, in we quarters. think got next few to that's up clear itself the

so, that payments our had well. aide to repaid also that affiliate, to up half need about some We and of amount pension that be as

Daniel Jester

you, Thank Okay. guys.

Kirk Milling

Dan. Thanks,

Operator

today's conference will participation of conclude first portion your earnings quarter Thank in thank Q&A Resources' and for you. Ciner That you conference webcast. We call. the call XXXX

disconnect and have now lines, may your day. a You wonderful

Sisecam Resources (SIRE) 14 May 192019 Q1 Earnings call transcript