CINR - Earnings call transcript Q4 2019

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Operator

Welcome to Ciner Resources Fourth Quarter and Full Year 2019 Earnings Conference Call and Webcast. Hosting the call today from Ciner Resources is Mr. Oğuz Erkan, Chief Executive Officer. He is joined by Mr. Ed Freydel, Vice President of Finance. recorded. being is call Today’s It is to the over to my Freydel. pleasure Ed turn floor now

You begin. may

Eduard Freydel

and Thank our Good full will And to some provide discuss some Oğuz you, additional joining with our close highlights our operational for Laurie. Erkan, commentary growth to I additional fourth the morning from and details the plans. call quarter will will related Oğuz and CEO, year performance year. earnings. you XXXX on discuss thank then us financials. our

Before from of suggested forward-looking to as included a SEC well on the comments we securities remind you in for assumptions the today’s which detail reasons, these results Actual based I would information as begin, and available like materially to by the number certain federal that conference currently statements discussed company’s of are beliefs, comments us. in call in meaning These are constitute laws. filings. more our within differ results may

Certain non-GAAP financial these flow release. non-GAAP of call Reconciliations earnings EBITDA, measures in be financial measures. our ratio adjusted this distribution found coverage and press discussed measures are can during financial distributable cash including

I call will the to over now Oğuz. turn

Oğuz Erkan

morning, marked reliability. and XXX,XXX operational for call. good tons. approximately demonstrating our year-over-year to and turnaround Ed, of million on by record XXXX X.XX of Resources, fourth XXXX emphasis increase commendable success production and tons quarter short an The Welcome Thanks, highlighted from Resources’ full was Ciner production Ciner a everyone. in year earnings year a historic XXXX, annual production

our and assets. downtime reducing of tremendous efficiency Our commitment team show proactively the maintenance to maximizing

this importantly, contribute our member Everyone at are worked together turnaround. of team more to we’re for thankful each performance. of We proud this Ciner. to significant But

in particularly shift from sales market, international XXXX, more to us realized pricing. X price let the optimize to of favorable overall lower domestic volume export to order our during the first customers quarters in Strengthen

increase and both and sales almost export XXX,XXX increased And our us result, pricing average production improved from X%. volume and XXXX. a in volume to as domestically nearly tons internationally, allowed by higher customer This mix price shift overall by achieved we

with million income favorable EBITDA million $XXX.X flows adjusted a more $XXX.X in year, for sales, $XXX.X fund with net and expenditures million increases profile. us the Strong pricing cash our environment the maintain of operating in in of working to and production along resulted capital conservative leverage and capital net allowing

stage the of related regards XXXX. In project, the majority which the XXXX expected our installation be operational to of by was final is to spend, to our CapEx is first cogen CapEx the and the quarter in expansion of now end

The us new to generation turbine operation. consumption, approximately steam while X/X also steam requirements our necessary for allow exhaust will our and equipment of electricity self-generate the heated economically supplying natural-gas-fired

once per the anticipated project, the EBITDA meet Expansion we will is in in operational, energy expectations of benefit year, our improving year is $X million no economic savings once operating the an longer $XX million still $X of to initial of While fully we to due Green year annual operational, the million online. believe once $X approximately cost, increased adjusted per improvement to million per see River Project to

per our permits X.X XXXX. Project, in River begin begin half good expected securing on detailed million Green the the approximately in levels half we which of production engineering our second to of year. progress items increase tons major and of made also Meanwhile, XXXX necessary Expansion our to bidding expand first ash We is complete is the equipment engineering will Basic operations. and and will construction soda

which by capacity. the sustainable new would of of to end the startup us production We support continue to allow unit XXXX, target production long-term

project space. The certain lab the capacity legacy office account be and designing the such production expansion upgrading entire our to existing maximizing presents assets of systems, the the streamline a operations refining opportunity holistic and project, electrical into are taking and systems, aging across and units to process plant. We overall the by as

use logistics to efficiency and infrastructure overhaul also to load-out our maximize process. the opportunity order this will in of loading our and We flexibility

We project’s cost expect with to operations. fixed these our from allow than new along initial operate All process equipment to the production unit costs improvements design. our marginal proceeding will and ton estimates lower has efficient and the at cost improved incremental more anticipated current incremental a operating significantly said, and schedule. the expansion Thanks on production per is anticipated

the position results we help standpoint, are growth business. good to with position low strategy changes significant reinvest ensure stage. a phase distribution we on and continue in allow to flow for cash level and year as previous of structure our start the greater will to us liquidity From capital a to us to leverage during planning progress growth a XXXX flexible the financial capital Strong the needed

the XXXX, majority the take and a of of our place with objectives. recognize importance anticipate allocation XXXX in we capital the and mindset towards prudent growth proactive CapEx will we expansion long-term While

call the detail. who the in financial will year turn over our to more will Ed, I discuss Now, results for

Eduard Freydel

key around and for Ciner full-year performance, joining we to financial interest major our drivers fourth quarter and you call continued our everyone business. the evaluate thank and in some your and Resources. use Today, Oğuz, provide metrics some our the quarter year, I’ll Thanks, for from detail and

fourth representing during tons, of To begin, X.XX the volumes XXXX short full-year was XXX,XXX quarter XXXX million total X.X% the increase latter short and the year were over sold results. with a tons, during the

our annual and million execution. reliability, maintenance minimize project As tons downtime mentioned, an record, XXXX operational of Oğuz efficient production volume to X.XX evidencing team’s commitment for was

a volumes international year respectively. for by By over of sold rebalancing first able X XXXX year sales demand million and sales to the sales and we average decreased advantage sold million markets X.X domestic international quarters, X% tons export and in XX% take to our XXX,XXX to XX% high was the favorable mix in in sold were increase tons. Total X% increase tons, while volumes price over XXXX, our domestic year-over-year X.X by

fourth the of quarter of driven X.X% the and In levels the global by quarter, imbalance. by pricing an tons sold in higher of inventory resulted result fourth XX,XXX year net resulting combined X.X% in was pricing pricing a with quarter down QX Lower fourth declining XXXX, decrease a approximately sales international supply/demand approximately overall as prior net decrease from from XXXX, X.X%.

sales total $XXX or as overall. Still, pricing versus was a and of net consistent XXXX XXXX a increase the year result full strong million production $XXX in million X.X% overall, for

of because the in million Cost a were of increased products sold for full primarily quarter volumes. fourth XXXX flat compared to year XXXX million, sales Costs including increase $XX in XXXX, from million higher the same the variable in period of X% $XXX was of to costs, XXXX. freight the due $XXX

However, from benefited the in outside to products and a maintenance time cost shift contractors. and lower for consulting outage maintenance-related reduce need of result reduced costs, personnel sold a of for

XXXX, international expense, export of the of from year full higher expenses The equity-based SG&A million primarily driven increased by $X.X overhead SG&A full volumes. the lower offset the XXXX but by fourth during for from was decreased by in in and million given year XX% our X% SG&A our quarter by $XX affiliate, ANSAC, compensation XXXX QX decreased XXXX. charges decrease

full XXXX, of XX% million fourth contribution QX $XXX million while for in the $XXX XXXX XXXX operations from in provided year million XX% Cash by the the quarter of $XX decreased of XXXX. increased from

in of due decrease capital million XXXX by collections. and full-year operations, volumes driven The results working $XX increase to higher used a timing sales was in in ANSAC mainly to

$XX.X of million receipt Additionally, a we income. operating included in litigation recognized in the XXXX, which was settlement,

effectively resulted in coming X.X the Strong capacity associated cash flow has with cost generation the in times a XXXX, ratio years us X CapEx our adjusted positioning expansion net over EBITDA end to to debt the last of the years. at fund below

let’s MLP: metrics cash into we respectively EBITDA XXXX $XX of quarter the a these recorded EBITDA compared to how full million, recognized for and Next, In non-GAAP we as $XX.X the $XXX.X XXXX, million adjusted distributable year in fourth million and key as the results XXXX. adjusted we million flow. of adjusted turn to of EBITDA an of monitor discuss X translate $XXX.X and

is Distributable as full XXXX for quarter million, cash flow million $XX.X and Ciner fourth to million of the recognized XXXX in gain $XX.X that for adjusted flow note year-ended $XX.X cash and litigation the in was attributable to $X.X of for million compared second million to respectively, the year XXXX. distributable quarter Resources settlement EBITDA $XX.X the XXXX. important XXXX It and included a

of At also allow believe coverage important unit per XXXX maintaining us and the growth cash needs capital reinvest times phase. the project. was strategy our and times funding The leverage, full current liquidity for to mark is quarter while manage of X through fourth times year. we X.X support as strategy for the this X.XX $X.XX distribution actively our to will our coverage this We our our for flow expansion ratio distribution,

I’ll turn to Now, strategy. and over recent growth back to performance provide more commentary call on the Oğuz our

Oğuz Erkan

Ed. Thanks,

growth Our soda in the XXXX, XXXX turned we ash as and strong embark we decades new consistent we our page into to phase, reliability and the Operationally, on build that our testament has this manufacturer to entire a team are world-class come. are production focus financial initiatives our have results on a for business adopted. to excited from

We international impact. caused experience in to weakness market XXXX, of pricing the market, Turning aforementioned in supply-and-demand the imbalance. fundamentals of we inventory did help believe will the and domestically stable elevate higher international resulting pricing levels quarter the fourth by primarily some

prices short-term international pricing supply/demand fundamentals, global expect indicative to increase long-term. of we and and the in volatility that believe over we demand will Overall, long-term the not continue is

see business we soda Ciner’s our presence. also benefits In combined regard, global that ash with numerous for when

WE our Ciner’s soda Wyoming to operates Turkish X operations. addition plants company, parent Our and in owns

producer, rise. around ash evolve way supply the and world’s consumption globe we natural soda low-cost the opportunity largest rates the the natural in ash As lead have as soda to economies

continents, is any or efficiently X X and securely to Ciner on With end-market well supply facilities geography. positioned Group

million and key to X environmentally unfavorable River is Project another step ton continues displace Green inefficient synthetic production energy leadership, ash growing as manufacturing Our market towards soda our natural Expansion processes.

sales netbacks date, transportation opportunity Group to Ciner the for collaborating take sales. distribution the better the of attract After termination utilizing that large network global to us efficiently customers. control our our should visibility already established global result we markets, our ANSAC global into has provide will by increased with the international optimized the expect Furthermore, into international serve and Ultimately, been direct in end-markets and costs Ciner Group.

concludes each This the working year. our standards want goals, your operating the record-breaking all In organization thank entire at next of to objectives Ciner we that over we their growth exciting forward world-class our safety our our few to above contribution continued for of remarks. Ciner prioritized our closing, employees I on you It achieved while because team is our prepared I to else. interest together in execute look Resources. for the Thank with to years. incredible

Operator

Thank fourth conference concludes year earnings the and Resources Ciner quarter you. This full XXXX call.

disconnect. may now You

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