OLN - Earnings call transcript Q2 2020

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Operator

Good morning, and welcome to the Olin Corporation Second Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead.

Steve Keenan

Good morning, everyone, and thank you for joining us today.

Before we begin, let me remind you that this presentation, along with the associated slides and the question-and-answer session following our prepared remarks, will include statements regarding estimates of future performance. are from and those these could actual that materially differ projected. note forward-looking that statements results Please

the Some our earnings of events. in of Operating Jim A data Executive the John XX-K, in Dawson, Chief past Executive differ will Varilek, section and this releases. and from and yesterday's factors slides and our today's information press the and Pat International; that website could projections of available Vice Investors earnings Form Slater, Todd is The release be described With Vice transcript cause Chief Vice President other second are President second quarter section and without are President Fischer, XX-Q morning recent quarter under Officer; copy limitation press most President the in and XXXX Factors Officer; our financial Olin's Risk and on Chairman, available Form results Chief Financial President, and under Executive to and release. me Officer. press Epoxy

will remarks, to we Fischer. to be happy call I and your turn John with prepared questions. We will take over will John? thereafter, now brief begin the

John Fischer

related three. through portfolio signs of And losses recovery. addressing in good slide continued to are a Steve, our minimum demand start COVID-XX during first demand morning The before morning, hope you, your results I early last impact favor seen families in your showing quarter questions. our second March. and Thank challenging times. and our keep specific were keeping this remarks you of healthy on and June in chemical I'll shared safe everyone. these Olin night. We'll

driven every Vinyls customer turnaround. three-year by in reductions. XXXX, Freeport significantly Epoxy quarter. was lower by and and turnaround businesses included second vinyl maintenance in combined by Products sales Chlor second one two the Olin turnarounds the quarter chloride in every and year-over-year. quarter XX% large Weakness demand, of These During the for took chlor-alkali a inventory declined place approximately the demand early Alkali Consequently, experienced one monomer planned compounded five-year in that at partially

and business's Overall, May each in Products exceeding increased low months volume the month Alkali Chemical April improvement business. Olin's sales and the from during April were by Olin's Olin's result, levels. sales trend Vinyls the point. have the levels a As weakest July June continued Chlor quarter

Epoxy we outages lower extending idling and further and were in have point to Alkali where generated Chlor maintenance a turnarounds idle temporarily operating temporarily Chlor of maintenance second reference, maintenance June plants Olin adjusted As of volumes costs. plant majority EBITDA completed the to by minimize and our customer as plan to demand practical turnaround, addressed extended the improved. an quarter and one assets. has was Alkali continue Today, undergoing we

XXXX volumes, quarter the from prices turnaround improved product will Third compared to lower second benefit maintenance higher costs and quarter.

quarter third are forecasting adjusted EBITDA second XXXX We is than levels. XXXX double more that quarter

dichloride quarter is quarter, in the Hydrochloric well trends. April vinyls in oil first reflecting and contributed demand demand demand our Chlorine second challenged. construction sector. outlook strong approximately XX% Weakness of weakness include Let's typical below from during the sold decline into oil decline acid and levels. the Olin's ethylene demand still largest volume urethane impacted four. to to historic now uses also quarter, The titanium from Chlorine began which significantly most isocyanates and that products global our now to is the turn automotive, levels, end helped gas. aerospace, dioxide, remains and represented and second and first pricing weaken gas below customers for slide pricing during quarter through and

ethylene seen We the during chloride dichloride third improved quarter. Olin's pricing have

year-over-year and across Industrial resins vinyls isocyanate Europe month increase slower coatings, recovery gas. and volumes resin now demand the Epoxy by and customer paced both for America into impacted urethanes. North decreased and approximately both quarter Our an We're oil weak and third automotive, and in seen in quarter a in second and have by one sequentially demand XX%, and

side, are signs pulp grades weakness. On inorganic recovering, the end caustic several are demand uses still paper while and showing of of

let's Now on which at look a five. take pricing, closer caustic slide is soda

rates indices availability soda quarter, caustic rose slowed price As $XX caustic chlorine operating per soda and in domestic second tightened ton. the

the system as compared expected Olin's Olin's quarter is when to Second environment second the uncertainty by remains caustic was demand increased chemical third continue businesses caustic ECU approximately sides highest the visibility the uncertain. of quarter July Future current This is trend soda soda year. of quarter XXXX pricing both of across in XXXX. and to volatility. X% in marked our The the price still on

have remain customer Our and inventories. chain order by patterns and supply heavily influenced and their been erratic customers

or we a it As be July pricing. than Olin's XXXX consider result, caustic lower will our than that equally higher year-end soda XXXX price likely

about is talk slide six. Winchester, let's which Now on

XX% commercial and last consecutive For segment business a year-over-year increase XX% These Winchester pricing. In sales the in of year-over-year year, earnings the due quarter, resulting experienced the fourth in XXXX, were compared growth. ammunition increase EBITDA. a quarter the to experienced second sales Winchester year-over-year in to increases improved volume same higher adjusted quarter

inventory third will level levels business demand the significantly quarter this of of sales surge. during in to commercial level this in XXXX, we our and commercial inventory year. to reduced second at meaningfully The the of responding ammunition our lower continue ability elevated increase The commercial limit balance the has quarter. expect Winchester strongest volume XXXX demand least the represented quarter to ammunition of the since through

an Winchester effective August announced price one the Following XXXX increase X. price additional commercial increase, April ammunition

date, update on contract by that annual Lake slide October to confident for meet we control Army's adjusted X. and Manufacturing Winchester's $XX adjusted sales million work the to This $XXX million. million EBITDA performed and are Winchester operational Ammunition increase can provide $XXX Facility Winchester these project. the $XX on incremental or Based to million expected revenue Army multiyear targets. an to seven, assume we City Moving Lake to exceed EBITDA I'll annual transition will increase City is U.S. of on by Winchester's

in During to vinyl reduction XXXX, cash transition a approximately by approximately approximately project $XXX we we In of of after-tax chlor-alkali realize of million down to contract cash independent will chlor-alkali of year. dichloride expects Olin by to XXXX, million working In million. costs reduce conditions. of production City to invest closures the EBITDA to begin technology both X, XXXX number On The industry to Texas EBITDA $XX which permanent as of and realize be expect the annually, year January benefit transition shutdown quarter forecast approximately $XX enhancements capital contract the spending Olin XXX,XXX of facility, of Freeport expense. arrangement per Lake Army are $XXX million to improve This late a will structure. manufacturing million These The between capacity this full from from $XXX expect sale are incur split to City beginning Chlorine contract expected part of XXXX, $XX associated acquisition. initiatives. the million is new million to fourth $XX direct the Lake XXXX, and annual Texas. and flow costs contract, is incremental integrate the and expected adjusted customer chloride toll capital the and in $XX third-party acquired plant multiyear monomer to These associated optimize in our a to in Products annually new with approximately our a from begins down million Freeport, is to completed of generation operations agreement. annual ethylene will businesses winding The generally million information Ammunition a operating enable cost its adjusted U.S. annually. year-end by wind tons $XX and around an of benefit

like turn would call the over to to Olin's I CFO. Todd Slater, Now

Todd Slater

John. Thanks,

refinancing flexibility economic which which quarter the was financial highlighted By several we we in company actions facility. During June slide X.X% and cash million cash the our $XXX amended issued million actions reduce should of current our quarter, expense $XX conditions facilities company $XXX of were expects May, nine. the In at we support a acquisition securitization become the our undrawn. of provide portion by on facility, of facility Dow refinancing It enhanced accounts included structure facility the both XXXX high $XXX.X quarter cost next senior are XXXX provides now actions of during a second first senior the These interest the million we is to with notes during a with cost several These drawn liquidity refinance high $XXX the to we years. navigate includes expect they $X.X following: of due XXXX. Olin callable. when loan over receivable We reactivated delayed million completed fourth million, refinancing XX. equivalents term credit additional senior of bonds, million. $XXX bank assumed of new million. credit the the to the draw ended the annual May, approximately billion and The bonds, portion revolving $XXX a in secured and financial senior Also that flexibility.

million, we incremental target focus which by by levels. on reduced approximately cash flow from XXXX We working to XXXX million Year-to-date, reduce of as our million. liquidity capital to such enhancements, capital continue $XX $XXX other represented $XXX working March

spending capital approximately lower second prior the in forecasting The capital capital lower and XXXX, are to is we be $XXX timing than million million spending expect $XXX half of year year. We the half levels. in million which to loaded, the of front was $XXX spending the

that lower capital be XXXX in than expect also We will XXXX. spending

to $X.XX September Directors of Olin's July stock. payable of XXXX, This declared on dividend share XX, by of Finally, company. XXXth August of Board dividend each is of XXXX. Thursday, on dividend are XX, we ready as a be common XX, Operator, Olin to is of on shareholders This close quarterly to on paid consecutive business take record questions. now the the the

Operator

first ahead. will Partners. question with Vertical Kevin our Research go come today from question McCarthy And Instructions] [Operator Please

Kevin McCarthy

good Yes, morning.

remarks mentioned idling late expand Texas. in a late to were still you Can Or that you and in on on that I the think time track on your think rates what terms think shutter line I likely related be? for some you plants. in note, you announced guess, you I XXXX? to locations changed? that Chlor-Alkali And are in that the of operating XXXX, prepared then, some has capacity Is intention

John Fischer

And taking The and month John, done pace can are downstream down was internal days answer I'll address trying where seven contractors plan. a it plant using had between we've first. XXXX. took context first question capacity running weeks is the avoid on to rather XX is you, and be six I Kevin. now specifically done off would of by and tell costs, shutdown to another done save can also that in and tell you three I to weeks with month any five to that only This doing we're down be to not second end the and a weeks, Texas shift it that's in out it March. one done on time. in what spreading plants we since overtime been in two with that at order I done plant point typically over was we've to two turnaround a costs. just every people there's

that of would the we probably them five four the some We've are have last had kind shutdown chlor-alkali of of seven those have least I we of doing. are over the at And So say kind sites had things different that months. plants.

Kevin McCarthy

And in I volatile been a see. have That's Epoxy I on business. the suppose, question recent then and had Benzene I months. quite propylene, second helpful.

the raw flow think So the of you account versus trend second the those if margins do third take might you forward into moving into your materials. quarter? important How inventory quarter through effects

Pat Dawson

this Pat. is Kevin,

us They right. little late. And late a quarter, quarter. saw the bit benefit and half second have the very the benefiting You're here us will second here We It fall I the third that's the it in been of volatile. first benefited in quarter. us off would in big that, say

the to now both propylene. in hydrocarbons increases why up, start quarter. the that's out third price kick and seen now And there reason we've you've got However, benzene right

of kind see we there's a it's of volatility. it, So where lot

Operator

America. Steve ahead. Bank Please And will with of from come go our next question Byrne

Steve Byrne

there? about Yes, thank bit Why you. $XX little contract? will there that VCM be a pricing $XX ask in I is this in range contract. VCM Yes. that mechanism for now to what wanted million And the

John Fischer

a as demand the originally range I'm facing forecast different today, The have there's when for specifics, in solider there you space prospect reason going move any uncertainty would that it lower we're the facing some the but give been have that and a there's than look you raw inputs. movements because to does around in we we not is just contract, lot of XXXX material at had demand demand into

Steve Byrne

And follow-up on outlook just caustic also wanted your to for pricing.

You know if in quarter highlighted higher would the third roughly improvement an mentioned that like in also price the sequentially third, was from I as by the you because just second it be same you thought the that be don't price quarter. year-end, average in could July. to

So is pricing of cadence the thinking half? your what on the second in

John Fischer

of the where the said, supply on then in we And for around just consideration our year, when the a outlook move were the referencing. price when That fact end especially quarter Olin equally both the quarter simply PVC and was seasonal pretty comment and I third ECU, basis. likely, to typically goes on significantly all the sides demand to quarter from weakens third was we that into demand fourth chlorine Our give or think, volatility you of the just late on system. we demand

Steve Byrne

And Have looked in that there. of you as a alternative in just and whether squeeze there's cogens? your hydrogen chlor-alkali one electrolyzers fuel an combustion production of more the for than out if I use other hydrogen your could at

John Fischer

of a use then significant it amount make which we hydrochloric acid, sell. Well, to we

other take combustion for So parties and hydrogen we the contracts than third have do with purposes. other who

Operator

Fermium from ahead. Frank And with Research. next question our will go Please come Mitsch

Frank Mitsch

is call. conference folks. your I assume last morning Yes, this And good John,

wanted certainly, my your congratulations offer and wishes best pending on to So, retirement.

John Fischer

you, Frank. Thank

Frank Mitsch

on system higher. includes is a surprise moving and could a because caustic contract And bit the so little Obviously, anticipating certain you're if soda follow-up prices I pricing it forth. of terms that are your that

I why system. at higher there is can thought quarter is in than the the mean, I doing look prices bit your a chlorine third demand overall, caustic demand. that PVC caustic perhaps as may So you understand But and a better be industry, demand

high about think might you the thought off July trend levels, As that the think? off? itself, have not that's the case, from Or you necessarily wouldn't you industry we to tend maybe or start

John Fischer

where a year XX% I of and both the were lot a a that of to are XX% have think, on lot uncertainty operating we they're there sides views Frank, molecule. seen PVC rates of demand And still around But below they improve. ago.

term a we some seasonally go typically you that would get you it doesn't, tight that of to that, seasonal things could read second that's caustic, I wildly slowdown what caustic not situation if caustic see not again. true. they're the say, over that where in the in demand half So robust. which just a that And do if doesn't roll slow going We're convinced is down,

Frank Mitsch

did ball when might were Olin? Got June. year-over-year in of for mention July you. of What your parity you we Understood. Got be you. in crystal that terms does And in better terms at volumes volumes than say

John Fischer

can I going question. XXXX. in think happen to answer sure that's that don't I'm not I personally

Frank Mitsch

Thanks enough, and again so All right, congrats. much fair Okay. thanks.

John Fischer

you. Thank

Operator

come our from Global. And Please ahead. Alembic Ahmed will question with Hassan next go

Hassan Ahmed

guys. morning, Good

in quarter. of just You have talked those a about trying your prepared guys sort couple turnarounds in get of what negative impact remarks sense the may EBITDA a I'm in to had? turnarounds quarter the of

Todd Slater

headwind maintenance the operations slide little about Hassan, deck and But our QX the May. know especially the this us from in really volume the of significant we on to part XX bit back April have QX. cost. the specifically in Todd. that a was a impact, is most talks of I Chlor-Alkali penalty is versus first It a

Hassan Ahmed

side on ethylene natural to the side the pricing there's Obviously, things, moving enough. side things. been Fair enough. of material choppiness the And of of gas some things. Fair pricing raw now

sort have you of pricing your As trying in get doubling what a of baking sense guidance guys provided QX raw that to than I'm just material you were environment more guidance? EBITDA, into of

Todd Slater

a heavily Hassan, Todd we hedged are at quarter is least know, this out. We you as again.

it's have So to think natural our good And associated small guide. in ethane with a costs for I we and I of QX degree think think, a confidence I QX, ethylene from high gas.

Hassan Ahmed

so Very much helpful. Thanks guys.

Operator

ahead. And next Fargo. come Sison from question Mike our with go Please Wells will

Mike Sison

give Hey, good rates in and of the chlor-alkali bit And need well. little second to a versus you get you color June in quarter sustain into sort of terms were the for EBITDA as quarter? do us congrats July? outlook of guys to operating the where what morning John. and your third Can footprint you you think heading to for that

John Fischer

As that XX% expecting you in are operating improvement we continued but you're XX%. in rates, year-over-year our know, and industry that be not see QX. QX rates would XX% were operating the they in to higher in mean, from to significant April. the second expectation I than around Again, were year-over-year. operating a down It late June going rates is softness quarter not

Todd Slater

QX. move July's But of and as saw industry. third made got that lower in rates we've up in are those our operating rates we step scale about to a the we the quarter. based the the we quarter, I we operating that, to what And built-in than I would add said what achieve of on that would the sufficient July, for discussed second to turnarounds larger And say us

Mike Sison

in are then the the Understood. term debottlenecking. rate your the operating expansions, of that terms changes terms in in you industry we think term path Any you've to this of still long view do decade, out parts of when capacity industry? for potential long years. of, past several, sort several mostly any had And for same the being on to five Made

Todd Slater

likelihood expansions way the down we've or term last think I to term And globally think has is. any months. four what path, capacity we're what long the uncertainty in given the near industry and three term the that gone experienced of the within of outlook intermediate still and probably I on near

Mike Sison

thank you. All right,

Operator

ahead. with And question will John UBS. go Roberts the next Please come from

John Roberts

your John the Thank luck. to sure role. good Scott you move is I'm on and executive listening in. chairman

So bar in quarter green welcome. On a demand chlorine you slide the third inorganics. have four, for organic for

was TiO softening two said, you into think quarter. I third the

So box, the just is and is is very modest? weakening minority TiO or in it inorganic two a two TiO of that large

John Fischer

first the answer I'll part.

just category? I and maybe two second in talk was on be said the the about TiO And we want that quarter think would box. Jim, weakened green is which to improving, significantly what you

Jim Varilek

Yes. It's lot good where this it. was so different was read elements And releases a some morning I broad-based actually to category. other There's a bromine and of strong guy, a forth.

So increasing. we coming quarter see what back of coming and up. Again, that it's as second off are a improving. as slow Automobiles first was and

So there. two. as and to by an And TiO the talked definition, mentioned, then just Bromine there's improvement I John

a it's So that's broad improving. category

John Roberts

it And slide still the year? initial at XQ, also tile it come from this has tissue we Or soda. demand XQ from and surge down caustic except on all boxes pre-COVID? elevated like versus for of boxes level had and Okay. four, flat, then and earlier an of is pulp By improved paper, to the for

John Fischer

you Yes. quarter, the second tissue the surge, side There's on especially had the big those in things. of

so extent. And to certain waning that a is

back So with it's in forth and forth. were expected with was so there would also return that fine elements you and and markets the the up. of just some a were in so surge so stretched coming pullback those And less really papers people work, fewer little that's be out to into bit offices more And a forth. actually, to expect coming people, being

to not a very of It's much quarter, the in which was off. were drop where dramatic just back second a we upside. the So settling

John Roberts

you. Thank

Operator

Eric with from question next Petrie the ahead. will Citi. go Please And come

Eric Petrie

a for And about could your prices Hey, does holding economics? curve how well with that you into cost And you changed impact export as little ethylene prices? the ECU John, gas year-over-year see has that do as good bit morning. talk still lower how XXXX?

John Fischer

now the the are operating curve spread to curve ECU, cost you biggest doesn't obviously, right cost relates I your it really that. just variable how affect is the say cost. And rate. fixed obviously, where we is ethylene As on the would on

was it natural place is for us year to where very think a on similar last I average. gas in

and price want PVC what on EDC matters I'll that the Jim And price think let I absolute to the Jim, ethane, isn't this, much relates maybe so EDC, of elaborate to... globally. you on terms in of based but what is of how

Jim Varilek

the it's everybody EDC the are think, are where Yes. very off of come there I'll back. that market's was plummeting just drops now right come of complete marketplace April The in a talk is a prices of EDC, took place, XX% that EDC in pricing. on floor. The after of I has place dynamic type There that taking pullback as, It's now terms in the specifically seen. market. dynamics back

to There's there's the and the ethylene. the in so ethylene around pick world amount that's of cost were Asia hit And that's PVC moving to significant that, And push quarter. importantly, based on up for you've speaking starting up. that of with and up a second components demand oil therefore, in got And economics moving EDC. the floors been addition the from pricing naphtha in

pricing that's All dynamics the in the EDC are those from the low to in quarter. levels of place increase taking second playing

Eric Petrie

Helpful us versus recovery color. ECU help you sequentially. molecule Olin's then the overweight, compared underweight volume to give your industry? to about Can think where us And

John Fischer

on say, side, the I on at underweight look urethane/isocyanate overweight industry, and the we're the probably you would vinyls side. we're if

Eric Petrie

Great, thank you.

Operator

from ahead. question next Yefremov Alex come the Please will And with go KeyBanc.

Alex Yefremov

morning, Good as and everyone, well. congrats John you. Thank to

EDC of the quarter expect you the on follow-up in higher Would quarter that third price your versus to a realizations? Just second in terms be price. for

John Fischer

quarter. the higher Yes, third in

Alex Yefremov

sheet, that the entire what full balance you to are on do then have are your related covenants revolver? currently? access this capacity to And And revolver the

Todd Slater

to a secured access the covenants million so the end June, based $XXX This is debt. now is secured revolver we in And at is to May, covenant structure. times, and have full do Todd. secured The the delayed covenant EBITDA. on the because loan. debt X.X and term adjusted had The draw only of in we now basically went The of we

those of metrics. kind any within well of So

So let's see.

associated agreement. a with As improvement significant in we our new financial bank flexibility said,

Alex Yefremov

Todd. you, Thank

Operator

go Tudor, question come with from Holt. Please Matthew will next Blair Pickering, ahead. And the

Matthew Blair

everyone. is had looks closer morning was back on It I approximately to a revenue your question margin Winchester good then, back like XXXX levels. margins. But EBITDA Hey, to XX%.

at still XX%. it's Now

this ramp do expect revenue year. margins? forward? you So going you and in to this just talk Why isn't it flown And you've volume what could seen through about

John Fischer

a at way cycle, If products, the in your business out over matures as surge, phase certain you you volume the surge. demand and of first of the operates course there's start expand surge Winchester look of get margins you the shortages the typically more you because the power pricing get a and of over the course

are So the the years. surge where at quarter we been coming the into of and first the almost that was second end we quarter, of really this had for other X.X

coming what call, second and So increase, higher I would margins. increase, now was the reflected are we quarter. now margins, an with, one said, none one on April we there's in was and price August which an the to there were cyclically of low much really as we path And cyclically in price

Matthew Blair

demand QX? you talk move elevated good. could And you was like in prices activities? your then if bleach up about there? so, bleach quarter-over-quarter. Why didn't flat pricing looks And Sounds Did have it

John Fischer

bleach would a was lot say demand quarter, flat. or seasonal. know at a remembering pricing record in it is to that was I say quarter what of I a the down you're looking that in second second don't for

it's than other that on comment can't that... I some of and just So

Matthew Blair

Just slide looking XX. at

John Fischer

Okay.

And goes the to mix. just some of that

Matthew Blair

thank Okay, you.

John Fischer

Okay.

Operator

go ahead. Please And from our Leithead will Barclays. next with question come Mike

Mike Leithead

the slide return about. heavy quarter morning. of quarter-over-quarter. at well. the talked the XQ go actually in you XX, to topic results my I the good looks just John, your chlor-alkali turnarounds. in turnarounds year-over-year where it I to looks If maintenance I and lower that deck, And congrats Epoxy, and add as and its wanted thanks, Great, If impact Yes. up first to on

So can in help for costs just other I the you slide? on that triangulate there are there see me? that don't Or

Todd Slater

the of the affected that Todd. turnaround the VCM because and the April in really with especially turnaround to earlier, missing, volume, turnaround year EPI is chlor-alkali and our and in as mentioned I first significantly chlor-alkali this the lost of operating The Mike, Yes. part component this Epoxy relates rates May. is

of the top that on is you that on slide. see this So numbers

Mike Leithead

it. Got

question That's just a Okay. allocation. And bigger John, helpful. picture then, around capital

borrowing focus this the cash not and view is for does callable deleveraging hopefully, the flow the I I on the later year. think, today. of this? your obviously, the probably ways in refinancing is next costs mile dividend and the near-term getting that presume bonds your guess, light marker in how dividend stock Board the full is credit in that of I dividend some impairs Because and

John Fischer

is XX a I as Board the it's value. is a long-haul dividend look the it a key the that And company done, And this of years. the very shareholder if and time, it you period I'll last component of myself, Board has over would at there looking speak in for least for at say, in and the we long recognizes company. over at points of recognize time dividend all the cyclical are where

So issue and creating that. an view. that the borrowing capacity or it as any sense our have is it don't that's anything to I like relates

Mike Leithead

Got Thank you. it.

Operator

Capital. question Please from next Arun And come will our with ahead. RBC Viswanathan go

Arun Viswanathan

working Good pending several you with on All I last the right, over and John. your appreciate well, years. morning thanks. retirement as congrats

month So the talk saw first maybe maybe I looks here first decline just Usually, I the one near-term of unusual. we about guess, yes, one off, like see continue going. declines? expect, caustic guess, we in be we declines that soda, just I month to keep do would guess, July. Or you

if maybe remains stable you just to here? and as pricing from perspective offer here your can trajectory the So

John Fischer

create in of caustic visibility trying plausible entirely higher does that be PVC is think the demand operating was into not in that point the caustic both down of a we make caustic late probability. just have, XX% were typically Caustic in to in this. in a driven you we there's announced think and we operating on on we a it we there I up trying down. gave quarter. recognizing the making could see seasonal, that quarter, mind demand end end five rates is fourth step third of molecule quarter very typically the either that the July. the increases Keeping fourth we seven-point And point very price side and is the of forecast, a we in the drop year a go limited. rates. mean, the that is probability I than we in were uncertainty, think see caustic to And I by in over and you that was But out there's industry said could that lot I by not to that typically a before seasonality. wasn't sides to also industry scenario a it where has meaningful broadly, were the

Arun Viswanathan

appreciate now to EBITDA that Okay. in to on not sensitivity guess, your expecting is slide confidence in I necessarily mostly It XXXX versus I specific, company on detail on related $XXX correct? in you And And demand, or looks price price What's thoughts some that? $XXX could volume million? maybe supply I offer eight. level and you're sounds that million and it guess, uplift added the XXXX. like

John Fischer

say would of I is relatively independent is $XXX we say that What million, market conditions.

flowing very through about the feel So income good that statement. we

going a to the uncertainty different XXXX. was question entirely come than to of to expect the to be I just at base of other higher million uncertainty because right suggest, a will be said, there's $XXX what about all be back base would equal, and now. we of around would and volumes things there's think pricing I an it and equal, we But being things EBITDA XXXX's say, where I lot those demand I lot moment, about in adjusted that's be our would

Arun Viswanathan

great. Congrats Okay, again. Thanks.

John Fischer

you. Thank

Operator

Please question Travis go ahead. Sachs.. Edwards with from next The come Goldman will

Travis Edwards

just mentioned like looks us potential so, just that appreciate I a can to wanted as a can balance come your debt I follow-up uncertainty. if to what of take the secured cube there's structure preserve appreciate your those there issue ratio sheet. willingness ask or just long-term is you either your what limitations? covenant secured level out far morning. on the lot can good to the to question to market And just blue Hi, deal you thinking leverage notes? completed that of a improve of the team you CNTA I as then remind at between liquidity, But and also if the wondering in there's is business. capacity liability again willingness, to again, more

John Fischer

of me And to in Well, bonds that remarks, the we in $X.X billion call his have XX. to place do as there that. of have callable bonds. Dow starting that part essentially said address we to October intend the do loan Todd is And let first term is used we be the

be So million more. used that $XXX or can

question. borrowing secured You can answer I don't... the

Todd Slater

we if remainder billion. we X:X at the to closer secured and is think would refinance a to or leverage don't question, that the is your $X.X what limitation ratio, would our about John beyond specific comment on about of whether this incremental to consider Clearly, point that whether, much I mentioned, debt basis when your million, additional you $X.X borrow $XXX occur, billion. would borrowings

Travis Edwards

maybe we're guess, savings. the little I some looking there the And was Got there. through slides, can appreciate the it. granularity as interest changed follow-up, think as cost as just message far as bit a a has I I those.

it's million. you think the I $XX $XX in call to premiums. slide of to think down about talk million then now deck, $XX million I later million $XX the from And

what those that is Is those that of the sort need notes coming can implied safe taking just billion take of triangulate you're we So that out? to considerations out? between $X.X two Or we account? way numbers, sort a portion more are wondering, extrapolate of to the the into amount there of

John Fischer

of the loan the draw of $XXX reduced $X.X million. amount our environment. different use to delayed delayed That take We of billion the As the we out we had could a the to from originally loan part expectations bonds. all draw term in term of restructuring debt, callable

Now are his we all going in I something year. $XXX to year, the saying, last that of And now essentially we said in is what's million. what reflected we're slides. That's know early Todd And had reflected different this remarks. call

Travis Edwards

to change. Anything thanks. Got it,

clarifying you, your end team. the appreciate of and just on best and luck John to So,

Operator

Bank go our ahead. of from Spitz America. Roger will And next question with come Please

Roger Spitz

in did export morning. shall Good say compare or Chemical is back EDC recession I the Dow 'XX, I more this you you. than to do This recent chlor-alkali. mean, XXXX/'XX you, Thank with in context and 'XX? event now

Jim Varilek

wasn't you, in 'XX. is I Jim. 'XX, honest the To in with be This business

time. that more period So I with of can't or we're whether make a less comment about exporting

So I that for information don't you. have

Roger Spitz

you range now or because that would EDC capability In different by contract, occur, you the that Okay. perhaps lower up to it's benefit, that that All were more right. chlorine range a exporting production? suggesting volumes. capacity that make might take VCM were have you and VCM EBITDA consume the customer to if If that

Jim Varilek

Yes.

in We assets. our flexibility have

would capability the EDC on that short have we outlet for fall the So that provide contract. should VCM we an

Roger Spitz

Thank much. very you

Operator

Fischer session. are no questions. there This closing the the back John concludes And question-and-answer over to to remarks. conference like any for turn further I'd

John Fischer

Yes. us talking forward about again and days. XX I thank look in joining all and today, you to for everybody to

thank So much. you very

Operator

presentation. now Thank the And attending today’s has conference concluded. for you

disconnect. You may all

Olin (OLN) 6 Aug 202020 Q2 Earnings call transcript