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Ed Freydel | Vice President, Finance |
Oguz Erkan | Chairman, President & Chief Executive Officer |
Welcome to Ciner Resources Second Quarter 2020 Earnings Conference Call and Webcast. Hosting the call today from Ciner Resources is Mr. Oguz 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
Thank Good earnings. to discuss you, joining our for Stephanie. second morning and quarter XXXX you thank us
remind differ information financial which Before release. in cash I as beliefs may in conference Oguz. Actual These from Reconciliations filings. distributable call this of constitute I financial we call non-GAAP number press are as are of currently certain results us. suggested be of company's meaning discussed the statements results over the securities the would including to well to today's within the begin, call, detail forward-looking flow available SEC and federal the reasons, in those comments financial during to measures. you measures materially these our like based can discussed included earnings non-GAAP and measures for will comments more that distribution EBITDA, assumptions laws. in found our turn on coverage adjusted now by Certain are a ratio,
morning, earnings good and Welcome healthy Ciner your time. hope quarter this I ones are Ed, Thanks, staying family and during second Resources' to call. difficult you, XXXX loved everyone.
challenging The pandemic impacts from as and economy. for second the a XXXX quarter we of was COVID-XX business, our endured, major slowing global
during pandemic. well-being this approach uncompromising continues and safety Our employee to
operating our and implement procedures But global necessary have been altogether. families and our our amid always adapting a facility operations keep employees the safe to crisis of to execute While to new safe. was pillar health continue we challenge their a business,
make in ash our confirmed not Overall, export second that quarter. significant successful. high softness by had downward largely to resulting with to our far the on pricing impacting the safety to on thus operating us avoided market dedication performance our soda operate. have pressure and health disruption This six a and positive standards team the workforce, of cases effect year-to-date, the We is our due ability to
the reduced production prior highest domestic we First, operations. international reducing to to response in in customers compared first curtailment our the volumes. several reduction We of quarter production year by assets a from our in and cost XX% production by took advantage flexibility approximately by
also our supply, its useful beyond in We turn which helped from production DECA extends life XXXX.
than our us, reduce While This experienced to to and the coronavirus. we for in market is production devote and customers to which closely side, at also facility, manage driven maintenance producing employee towards sharp third inventories by ash reduced mode compared the year. of on the operation The less by our of outside The on impact expectations activity the supported resources our soda of limited demand reliance lower were global their which initiatives. our limit XX% navigate largely contractors. soda at was manufacturing as the international as of beginning ash demand was decline entering was number to unusual able helped parties capacity improvement our health and an initiatives decision our reduce safety a and
inventories by supply to strong led XXXX. Chinese by the export demand, further of sales. high to The and the months demand leading which lower price began the deterioration nature our in in export to compounding markets surplus higher production year effect additional production, buildup Additionally, a international the of first was inventory lower market been impacted market of of compared X with despite than year has levels X% The long XXXX. XXXX through key the due to nearly and
downstream weakened temporary, Specialty architectural of automotive stalled May, quarter to glass although manufacturing April idle glass and customers impact construction second many lower likewise led by other was and in glass for resilient flat and side, our -- auto of output Gas as positive see the oil we and activity demand reduced well. U.S. domestic significant, many as faced production to domestic The more particularly On as to was gas Container plants stripped we producers from in has our loss much the sales be demand the indications been hope demand, while much of customers. glass
to the there sales financial adjusted year-to-date generally However, the note million obligations. nature our pricing of with million fixed spread volumes are EBITDA annual contracts. protected in through expected country due I ensure the meet Overall, to and from domestic persist quarter end to sold which year, taken resurging coronavirus. were will of last recovery short-term of potential and million is the liquidity translated second the we XX% our to $X.X headwinds year, improve of grapples flow weakness EBITDA as that of $XX.X With a mortality adjusted have our the of to to of cash measures better sufficient and $XX down from net price quarter. market
undertaken work suppliers renegotiated have contracted with contractors. noncritical including internal We essential services and avoidance pricing initiatives, maintenance and labor cost-cutting or several possible, of resources using versus when
positions the also principle top is furloughed supply and chain overtime focused while avoid our this livelihood We in costs. employees us. of We mitigate on to are are and efforts logistics and interaction adjusting costs in the cost $XX not expect is to crisis our also have said, we to that for throughout actively to attempting our success. excess as million long of our deemed schedules we personnel these a or excess savings range managing hiring the a invest the discretionary employee of plant our reduce we underlies off people I'm operating for very workforce fixed to say, inventories any reduce XXXX. the costs. frozen that at during All priority proud it have for a laid have several shift standpoint, term, From
project. to expenditures margin X a leverage engineering quarters. flexibility year, comparable on capital needs analysis, with capital River maintenance leverage detail. of maximize slowing focusing on providing pricing down have results tighten provide limited expansion additional cash success of the our liquidity. us annual in includes interim, for July, and critical for expected our tiers We the expansion more historical covenant. remainder environment. additional capital to the million turn to This amid proactively X a facilities adjusted critical to overall value maintained structured capital the and our leverage adjustments projects. are large have The desktop Therefore, our instead, eliminated an rescheduling our capital discretionary on reduce next quarter we put ratio the considerable leverage over flow covenants will the now ton these XX%, and the to expenditures credit liquidity Ed, to expenditures over uncertain respect for the with expenditures roughly also I to allow increase basis our our amended our projects financial for in and low for in Green support line recovery Nevertheless, to And who by EBITDA discuss maintain the and time our demand our call pressure year our to will will weakened the and marks capital we
for quarter continued in and joining quarter for from Oguz, Production customer was performance, our were to expectations of as Resources. cut some major demand. quarter and use XXX,XXX lower call key tons, tons Thanks, to your from approximately metrics some evaluate forced we business. short second Today, thank to we the Ciner drivers you, and our the volume interest everyone, our provide detail I'll for the financial to XXX,XXX second react around XXXX
COVID-XX drop to trailing our X.XXx. we first the of in the export ratio despite in QX second access spot marks in $XX.X in maintain our gross from quarter ash expenses, $XX.X weakened management fees from million and over the fixed lenders a perspective, net X.X% from covenant price the to XXX,XXX to low production $XX.X in a including of second volumes exposure. sold XXX,XXX XXXX XX% we and first sold the adjusted result quarter, $X international comprised ending With the second leverage million XXXX. the evidencing decreased capital of of oversupply, to by tons second decreased million year-over-year the inventories we sold income significant for a a $XX.X sheet million our of from we believe decline the X% through by leverage soda levels maintaining short strict of of demand Total continue mentioned, quarter quarter, approximately From XXXX due that XXXX, capital pricing sold, from employee with XX-month pricing amend resulted management difference in strained on net initiatives partially reducing of evaluating our in a decrease environment to the period quarter a Domestic a tons, the of uncertain of a the to maximum combined with market Oguz in conservative million lower that revolvers covenant XX% the international and and resulted contracted sold in quarter reduction tons time and proactively to products gross by Average to on primarily XX% total. a of the Cash in our Xx an XXXX, trough professional of was decreased quarter context XX% in in consumption cash of The costs. volumes proactive abnormally in to decrease tons. in release XXX,XXX year-over-year. next result expenses for prior working with the and services. same lower short XXXX fell pricing declined income dynamic of EBITDA we as debt XX% In quarter. As the QX balances. which year contracted year market. cost offset the second our adjusted EBITDA decrease XXXX, facilities. benefit receivable prior have decrease outbreak, international line domestic a in SG&A XXXX of market prices, million, year-to-date, recovery, XXX,XXX over we sales coupled domestic QX and in Timing need volumes approached credit overdue to ensure XX% was balance short the XX.X% to by focused compared Cost quarter quarter, the as for the in net represent of a maintain existing revolving sales full versus X Lower quarter of between accounts of debt provided sales QX in pricing the leverage as XXXX net quarter structure operations a quarter freight that volumes $XX.X EBITDA, our guidelines in quarters.
have we the access needs will metrics the adjusted debt in non-GAAP recorded unsecured. capital. are distributable below key banks, on not will be our higher quickly of margins our leverage were an will amendment will which property terms, well suspend near-term focus commitment to million close of than the difficult leverage diligent and liquidity distribution. of Directors and the downturn. would compared a adjusted Xx current anticipate XXXX. million forced as relationships quarter compared XXXX Resources amended leverage maintaining If leverage strategy, resume the tiers. a of $XX.X in leads and capital the appropriate anticipated terms second we significant continue X.Xx, released, us cash distribution the flexible redirect our second This distributions strong Management to negative unchanged facility to In we to distribution, quarter of quarter will ratio to which our as to be context the quarter to decline the again covenant. increased our the XXXX. do which sheet, on also and for our Due of and in able The distribution our unit to only second flexible liquidity with expenditures. is each to will monitor when Ciner the turn attributable Xx surpasses of distributable evaluate and security Distributable whether the at At to While flow. mind, that note restrict X.XXx at Board in $X.XX per surpasses to to leverage $XX.X our will XXXX, a balances made if increase MLP, distribution include security. to that management pledge $X.X $X.X that lower key quarter, into of depend liquidity second flow With addition to a materially, quarter our was margins flow half is to the agreed to we through I our ratably negative flow for second cash we the EBITDA, XXXX, discussion decision X.Xx, the favorable our been cash million notably in EBITDA up quarter personal second preserving of and cash we existing XXXX. Xx, historical our coverage it's in million as balance We
our the back I'll growth distribution to Now provide on objectives. turn suspension, Oguz and business call to strategy more over commentary
Thanks, Ed.
chain. global significantly earlier, contractions discussed economic COVID-XX the entire pandemic value ash impacted the have As and and resulting soda market
positioned strong the has on industry as doubt is little us forced there long-term realign business outlook near-term our decades the priorities. to come, fundamentals to and remain, the is our for leader impact an for While our
is Our Board and liquidity, the to our such the cash position tough required to distribution. Directors improve suspending a slowing our was plans took distribution of some management decision facility that which our and as certain our credit lightly. us Suspending capital immediate and maintain not and decisions, has make focus amend down
facility operations distribution want our distribution the is concern. the to suspend well necessary macroeconomic it as and to our liquidity on obligations pull, we forward growth was And day-to-day inevitably ensure maintain lower to free a XX-month conditions the we keenly structure market focused capital market continuing will look to liquidity a us and navigate will of foremost maintaining last to is the our at long-term to we ratio our flow as access maintaining credit capital Meeting current we strategy. critical are uncertainty, to debt the Given direct year amend trailing needs. our our lever to while in we figures, level. meet operating The the a an be EBITDA maintain allow help through prudent of down remainder to leverage suspension sufficient repayment to conservative cash as while
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soda be continue long-term market volume. additional confident to the ash demand We fundamentals of to in support
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our commitment we XX, us sales be our to WE allow happy us chain and with and refine earlier our control is a work sales disclosed. but which our into our are allow will year and stress remain export have as project as and in will our our disruption beginning our decision to long-term export plans, activities the Ciner This that has least, Soda concludes will River also will plant thanks COVID-related not we navigate sales, for announce and continued efficiently company, including can Group, we optimize place of and but a more online. soda WE target to customers. world's in transparency next volume for reach closing, significant gain people the to avoided business, export direct over operations us sales to Soda, our incremental our bright XXXX, marketing our our continued safety, marketing effective control new from ensuring current to for have help want The prepared ash organization, to to more to more In is better a to future to which markets our for strategic Resources. on global confident unfamiliar previously interest will navigate parent team environment embark channels subsidiary we of collaboratively we now December and our independently continue transformational and have excited well-established our I X Green changes natural volatile such their ANSAC, level we protocols response exit It Thank As exit health landscape, I'm and growth only remarks. market in strategy not to Ciner robust Last managing fundamentals safe key our ash business. to demand to once to soda which industry leverage to producer from we maintain recognize operations. our our the comes COVID-XX a an largest global we customers. you supply and a to in expansion implemented year. Moreover, distribution of economic than employee
today's call. concludes This conference
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