OLN - Earnings call transcript Q1 2024

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Operator

Good morning, everyone, and welcome to Olin Corporation's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead, Steve.

Steve Keenan

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

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

Past Risk differ Factors factors earnings that of of yesterday's limitations could from to our website will slides Events. the results without in projections transcript available of today's recent Some in press most in in actual the section our and under copy Form our described are Investors cause the and be release. XX-K A quarter first section

release with and under data and press prepared earnings Ken the CEO; information morning Ken call financial Lane. begin other over Releases. With to thereafter, Press be questions. Todd to Lane, and We'll our turn available and CFO. are take now Olin's this Ken? your me happy I'll remarks we'll Olin's are Slater, Our

Kenneth Lane

good Steve, Thank and you, everyone. morning,

Let leading Olin a I'm define enriched me be with delighted I'm employees. of our portfolio, history this positions the the to value has company leading phase across as looking and long next team of forward start and saying for shareholders part by Olin. to we creation

strong team. the team Olin's upon with has building is shape together chapter members and balance company great and with This story. in foundation writing start Olin a potential, investment-grade this to Today, Olin success look in and an incredible X,XXX our forward next I sheet

his in very step our transition. to record Scott change a which the been time want company, of thank during leadership I has support Scott his of results. Sutton with and gracious for do resulted

runs Olin's deep model, to Olin I'm model, support believer I to leadership frontline and the team from embraces winning a approach. continuing am absolutely our entire in commercial that manufacturing. value-focused and firm committed operating senior The

Now near-term to my talk I want about priorities.

our our efficiently and with keeping reliably. First to focused our and operating reliable. and foremost safe the is leader that running our the while being safety are coincidence on safely, we are people a not And communities respect performance. It a is safest operators most always assets

Next, Olin as is that our demand it's investors continue be cycle. ready flow more And and capture imperative. we'll seek buybacks a and to needed market achieved an value are. Also, coiled appreciate the me to gains as significant is provide customers we I'll spring. value to consistently we volume, recovers our have the strong support defend opportunity. Olin's is that commitments to on whatever leader our across clear generation cash Delivering that the industry share pull and

be focused and allocation buyer shares, our delivering We will a of disciplined above-average strategy will on our capital shareholder returns. continue steady

I'm Markets Finally, long-term the and will will year-end. transparency future. that strategic committed in Capital around share communicated with on Day be a near a we More to growth, for road during stakeholders that providing Olin map

alkali chlor continue our the inflection our business turn the the in Early the Olin to supply, system. decisive ] point during take took and quarter, drop. actions curb quick stopping accelerator our across quarter advancing tighten erosion and a Slide let's [ at value price first to successfully value initiatives Olin Now look X. fourth to effectively

water dioxide chlorine at quarter, by level saw pulled first agriculture, urethanes, Olin treatment. end our improved titanium several being and key we volume uses, including value During across the customers

cycle caustic low have and than is United outages availability confirm beyond that Trade a As soda. unplanned expected. we are bottom. we the kept and caustic inventories supplier publications quarter, tighter from look chlorine the States, seeing some seasonal demand domestic first and for increases planned climbing In up caustic

Now our X. business Epoxy Slide let's to turn on

During our of XXXX the restructuring actions. our continued quarter, benefits Epoxy business the realize to first

higher-margin while of asset growth support Epoxy systems the the demand cycle. Our also will commodity reducing base streamlined our exposure Olin's across downside

seeks antidumping playing U.S. field. level announced to initiative the recently Our

beginning climb the The quarter start the the Epoxy recovery a for marks of trough. a of out and of first very-deep gradual

As that will into quarter, formulated continues building from benefits the realize we our higher-margin systems. stronger focus second restructuring and momentum continued on

a Winchester Slide to turn Please X for recap.

demand sequential First our and for adjusted be fourth delivering quarter commercial to good, strong, was the EBITDA continues military growth segment ammunition quarter.

year, commercial limit could we're shortages propellant on that concerned this working actively and ammunition are We supply mitigations.

of a in business Winchester brand business, exceeded has cash and our industry great to generator the Olin. Flyer integration White flow Our and strong the addition leading the expectation is for a

During plant. and This quarter, operated Generation project built. ammunition ammunition most to world's expects Weapon be break plant Olin the on will Next funded owned designed, ground ever Squad This and small-caliber Army's but second by the Army. will the transformational built Winchester, U.S. be the by

but sum bright, trough, Before is must disciplined review position. to saying dedicated to Olin's seeding up has I future the by pass our volume this. ] through value. and to maintain to led extending I'll [ it our remain we financials, leadership Todd Olin

As profitably demand capture recovers, we are recovery. the well market positioned to

We we this will ensure cycle, to to continue and the lead that discipline new normal reset durable. remains have with

had engaged with an and the value. differential provide many team of members. to meet our The team, Olin will of with funded. well over foundation continue month many and extraordinary and build generate visit highly opportunity committed last to I've a shareholder is run, we And Olin the assets operating to well sites our model upon.

it pass now financial for Todd I'll a few to over highlights.

Todd Slater

recessionary years. headed Thanks, into experiencing manufacturing Ken. we've the over environment been X.X last Olin great was in shape, financial this

investment-grade We investment-grade ratings. balance committed foundation a model. and credit sheet achieving of Olin's key pillar to winning rock-solid additional remain maintaining financial is our Our

approximately with On March we billion XX, XXXX, cash of first available and of liquidity. quarter $X.X the ended and $XXX.X cash equivalents million

]. net our approximately due [ increased seasonal expected, million working $XXX year-end, primarily typical to we by in from As debt the increase capital

later EBITDA X.Xx, ratio to Xx was adjusted which this we debt range return to net Our to year. expect quarter-end by the

projection cash cash unusual a approximately Our totaling usage anticipates million. flow $XXX of couple XXXX items,

that Our of payments approximately is than deferred higher $XX international to tax year. forecast rate tax paid XXXX to are this million normal be cash forecast later to be due

we energy [ the supply expecting payments approximately long-term contracts of million $XX Also, are under final ].

levered items, equate these flow approximately Excluding XX%. our yield cash currently onetime would free XXXX to

Finally, levered our repurchases. investment-grade flow of towards a balance sheet share XXXX to cash continue cash deploy enable substantial our flow Olin to and should portion free

now take ready Operator, to we are questions.

Operator

from Alembic Instructions] Hassan question our today And comes from Global. [Operator Ahmed first

Hassan Ahmed

new first and provided. of is, And on congratulations initial that first guidance My all, you've role. the XXXX on the question foremost,

[ obviously billion of to You're north $X.X guiding in ] EBITDA.

we north QX it, call a annualized million and what the point, take EBITDA guiding reported if were ], I $X.X at of your $XXX sort [ as, billion to at starting mean, of million mean what EBITDA so bridges right, gets to us, value XXXX you're that it, views my million, is $XXX to [ primarily guess so? about million quarterly guys us that accelerator maybe to you ] I $XXX initiative that? incremental, that is get had that $XXX or call the being penalty, $X.X billion, your talked historically --

Kenneth Lane

and the we in least Thank we the you Alkali at Vinyls have Listen, Product group. the were stopping first seen is quarter in the drop, for successful Chlor in congratulations. what

seasonal is now we though that's back. happening So is win coming for a see demand us. What

are seeing momentum. So we good

business The year, see to full is well Epoxy previously I'll what we're better we've think that in going said as is other the thing the Winchester. say performance you as about when

So let's not forget that.

we So second year-over-year, alkali the to going those to of year. we businesses of go chlor continue the see improve improve as both half is to as continue into

for demand positive some some seeing half the in signs are of with year We volume. the for back requests

that higher for momentum alkali, XXXX. higher from and chlor flat there. That's the that see So and Winchester results to I we Epoxy we how from we results with think that expect see we for slightly should get the

Hassan Ahmed

the the And that has things. a follow-up, of split about Understood. should trade side the improvement some on as antidumping Understood. sort it, we business. on guys industry touch you brought of cases organic bit sequentially further you think you over touched the as could between, there? the of maybe call Epoxy How these on as And improvement a well within about

Kenneth Lane

Yes.

year around seeing we think we year. asset So footprint team the the great the got a are restructuring the an the higher-margin We've of into influx job business States. United the the today. so But last going the being is that year rightsizing are seeing impact we last growing The strategy last or from over support products dumped did to footprint. that is

all see here. say, First, that's fight trade, we're for going I'll against you we're trade, trade, but unfair to what fair and free

believe first risk but going we're very we a continue early And and under a within producers that hearings to that case. unfair is Washington, in process, of that in X we're the trade. for It's week. United We've that States. the Epoxy by material there Having had this push D.C. the to it risk future. a we got is resin producing, here is threat only critical So

Operator

Our next Aleksey question Yefremov from from KeyBanc comes Capital.

Aleksey Yefremov

as current year. price this particular, in really, congratulations chlorine, some And was major And ] current other more business? need compare get do Or forecast? [ any [ ] something EDC, you just in you billion specific EBITDA Is how than hoping in I soda, increases commodities how CMA you that? CMA Ken, details details, sufficient? on vinyls do get any to to to forecast they getting well. the $X.X to are assuming are caustic chlor

Kenneth Lane

Aleksey. you, Well, thank

that we're with said to forget to strong going not year-over-year. We're see and in Hassan, very Going seeing improvements back Epoxy to improve. had to businesses Winchester. what of the let's Both about I are going those Winchester demand

headwinds see. even with We to are price progress well, there good making of we cost initiatives that as some offset the our

demand significantly the last overall, with be versus going to year. But Winchester is up

military, give being it international at was example, what you just year. last I'll one looking So twice we're

momentum businesses. in is these there So good

the I'm I we're CMA levels back I we're the value at lot demand demand indices to faith our we want. alkali, personally. chlor the and sure in seeing some or good that level, for that value want seeing ] demand. we that put the about are and to a but that of system. confidence supply value differential [ think what printing, than you And and of want When We say that looking not would pricing that at more don't terms any in we're coming at there look

Aleksey Yefremov

about second QX cadence Ken. relatively about second of the in weighted? say at quarters, talking Thank just of mean, better think Anything half? QX Do second-half about then same you the on And it more quarter. versus annual Or between rate sort you clearly improvement QX I second half? sustained that step-up and can is you,

Kenneth Lane

Yes.

from we're QX. So that continue we're you're that as year to just half requests saw maybe We step-up going back a to QX come slightly based to I QX, the a step-up earlier, getting. better from see And to in some the similar, And see to see to QX going to in, up. of start demand said of QX. on we're going some the step

So view. baked that's that into

If half going start is you think But demand expectation, the start about that weak. first strong out this. saying half definitely that half recovery I'm the last that our half some second indications this first we're coming of second was see back. that half year, And that's relatively to come the like not is of look early this going And we'll the was year, the the in seeing last relatively to year. start second year. to of are to we're and of

Operator

Patrick Cunningham from from comes question next Citi. Our

Patrick Cunningham

story. wanted you I success pillar, of Olin positioning sort see to writing ECU. great sense priorities job capital fourth do for done and the of yourself of Ken, next growth? the a on a Ken. sustainable allocation value welcome, just the Olin that has next stage of How the chapter versus Congratulations, Olin's listing get

Kenneth Lane

a way going the Patrick. around the new our and it to you, that the is at we're with that on of Like in and the specifics don't communicate I strategy. said have I got that the see thank be But prepared announcing we've I -- changing, that year, even back commercial shortly. strategy, about Well, capability end we'll we a more think with core comments,

with core of part company it's now, how businesses. that. and is our continue I run think a we core our We'll that

where executive we team, look step and the and it's We're next. go not But we at, to, data next and in coming that define share the help as we're with back see to compelling at are, we're that. going can same a shareholder you plateauing at where the going satisfied price an and and continue the future. is to step-change weeks returns, We we think going differential that to want strategy work to the months in to make drive we're looking

you they that in that proven today, that are look run can sustainable. of have we believe businesses. at company today is what a history now is has built Olin where many a we different tremendous is a where and something and But have legacy lot that they've businesses, arrived we we

to going model around time, doing And build all looking have. I'm that for we're model, we to stay can just to That's we look operating going this that from be at far things are very going this this that I'll things say, our but We're not tuned. say at core.

Operator

question next JPMorgan. from Zekauskas our from And comes Jeff

Jeffrey Zekauskas

rates fourth is in they where maybe the the to right? utilization the quarter? in different them alkali, My in chlor second than were your in that Were to memory quarter first be you're expect And quarter? close XX% is do you much

Kenneth Lane

with to see that. QX We versus little we activation. a hope to were we the little rates saw QX. slight we I you're the in We QX above very QX. not And similar Jeff, utilization were step-up bit bit a in a continuing that. going above were were XX%, doing that in at well. We're Listen, looked QX

quarter, seasonal the operating operate system I the We're going volume that that. again, would in we're we And that. that's starting to earlier, second to some we And match to normal not what seeing said demand we'll market. But see you are are going uptick our meet into we to our the step like that pushing up the adjust volume see. in to rates see be

Jeffrey Zekauskas

seeing of caustic Can in you general make see on a expect growth versus the to comment rate you're soda? chlorine or

Kenneth Lane

in into moderately water would expect, bleach better [ Well, ] improvement chlorine, the think normally getting treatment we're is I back. seeing and coming We're you right? season, which a seasonal

time, our chlorine. But anything operating point not stronger a So modest. it's it's model to going at little in how this bit in It's that's we're today. change

Operator

from comes question next Byrne from our BOA. And Steve

Steve Byrne

Yes. question Maybe you, a downstream strategy for Ken.

now, is Are interested with Another you What will your from downstream to Dow into more interest in other to customers? contract a shifting come that capacity year the chlorine in close. moving vinyls?

Kenneth Lane

to for me Steve, give you listen, any comments. it's early

got we've look take I at to give something ideas like we're Of we going to we to deliver going said but course, and answer that's And can that the on you value. look time not at, I'm highest that prepared earlier, specifically we're to an where things our think today.

that but I'm that talked give we've right certainly so will we options about at view not the look in anything will I past, know a that that that the one be at, and of it you it's we to looked now on. or willing

Steve Byrne

problem? availability propellant And issue, driven on what this options an to outage? And by your was the are offset that shortage

Kenneth Lane

Yes. that can way. chain you have That limited demand, prepared of you for put function of in demand there really But earlier is a higher commercial the propellant, is significantly good. supply And we demand very think be to Like military it sources said as higher. when continues are supply, imagine. the let's that significantly that remarks, about

that defense and just industry. for And there is being other also propellant artillery for is It's components for -- that not in. which supporting are we're what small the demand ammunition, the

in positioning of to are availability to We're here be I there be But that volumes. secure potential tell buy the scale have hard, some on early. some can't the material. very based that but we months ourselves would it's that and we coming terms you with of still the that additional in sit risk working not able So

Operator

Our Deutsche next from Bank. Begleiter from question comes David

David Begleiter

hope first, how source gone confirmation And been Ken, customers, on has that, [ forward? been and And on the with to around improve them, you what's any talk what role. as congratulations going ] their well -- feedback? on of Ken, new as part? the you've the

Kenneth Lane

know there in this and the been industry. has new industry I created things that I there the needed have tension have. last Well, the in But some you, order years. be in some couple over that to have happen the to of that value of I'll to not past that I'm that thank some listen, you, know customers, things I the products adjust are talked with we honest Dave. Yes, to

if the and with agree, we're can't on together. to going work we to to customers. relationships be to we're find run focusing to have model reality continue being ways And to continue able going good that our Even going is our forward,

so executive absolutely the committed team. to that So I'm and is

David Begleiter

I Very of best tough but know a the this Olin Winchester good. And question owner the just on business? to is is Winchester, answer,

Kenneth Lane

the tell big am Well, of business. you, Dave, I'll I fan Winchester very a

think I a that part this that that is is today of brand That's is our as company. undervalued view. my

we you're look going higher a portfolio for go way forward find that a So to taking we're get is going that will to as that look forward. to a Olin. at at, part that having business always value be something be of as And going to

are the it's that. get find that believe and business can that to we doing committed we Winchester a a But something higher for value we're happy that, very with to and path

Operator

comes Sachs. question next from Duffy Our from Goldman Fischer

Patrick Fischer

bit just QX walk. was wondering could you I if more the little give a clarity on

you think, bit comment I QX you move from million. the delta similar little to better a the So $XX will was QX, be than Ken, maybe roughly to a made think that that

So just to that is right to the over, [ $XXX shooting on put a about way about million, number, QX? the where under we're think for ] like

Kenneth Lane

Yes.

price ]. demand to uptick the well. is look, of or Duffy, that QX momentum continue that Those for coming going there into the QX, -- to that's businesses, we're to saw we up will out going continue walk we as a So line see really [ see seasonal

some For improvement at but an of improvement will mix. we're in improvement, seeing see looking terms volume in mix and Epoxy, our we

we're expecting in the flat. that We're like to going the see that previously have And relatively remarks, Winchester, to with going see be also We're then to continued we from impact momentum QX. continue. positive in restructuring said

versus be yes, going to about from maybe combination QX, to it's a that. as the a first the step-up better in way range put better the it's quarter. of mix than to bit I'd pricing, That's same But a the second little quarter So it. QX it,

Patrick Fischer

just keep to debt And structural down up year, more you [ guys clarify, do any need not ends to X.X your if ] pay Okay. rating. then investment-grade to this your right being

that therefore, so cash share all excess Did that to And right? buybacks. go hear I

Kenneth Lane

going be add to know, continue that's our priority, Todd, you I to that? want yes. Well, to if to don't anything

Todd Slater

Yes.

investment-grade have We an today. sheet balance

agencies results for have X rating where rate X be the the of grade, our us expected investment year. We are and that to

with we ended consistent where debt year. our for this as Our the of last year, is level, end expectation

structural to [ So have any repayment we ]. don't debt need

Operator

comes Josh from from question next UBS. Our Spector

Joshua Spector

Ken. congrats, My

So again I guidance. just wanted to follow the up on

So $XXX than I if XQ range, pricing we're you've that that up before the you're talking later talked year quarter less to expect about going year. you to million, to demand. the was like also seemed it need hit mean, -- than your greater probably through I I you that, guess -- million, to in question before do $XXX about guess, answered but increasing move a

So step-up XQ, volumes? if $XXX assumptions you million on pricing it, that from, you that versus XQ think call between how to about bridging say, would let's bracket

Kenneth Lane

math, I'm a first, number around QX. specific you're not your Well, with you giving correct and

careful from to of to And be that a that. slightly more So recovery I could a volume be lot that I QX. is the step-up with on again, coming. going want that range it would the we see put than of depend say, better would it

], end of we've coming momentum mix back from got in more pricing at volume CAPV between QX. a the price bit [ the but saw that probably volume little The we and is

to to It's combined there. The is with the be that the we're biggest step-ups going to in So driver be with see continued chlor driver alkali for to Epoxy QX. is margin going that pricing bigger in mix. improved portfolio be going going the

Joshua Spector

news there. headwind there's Gabriel in just been ramp-up If St. comments maybe some all? XQ choppiness you XQ any mean, have could on that the the Does in out I some call at that ask, about and or I

Kenneth Lane

We've a utilization system No. got rates. relatively that's operating low

in may able be upset, that to up at we're so that And system for shortfalls our an our whatever have to adjust we site to make can able for system. any flex

I results So to impact be our anything to there don't there. expect QX

Operator

from RBC question Our comes Capital from Viswanathan Arun Markets. next

Arun Viswanathan

first I you to good again. hear on -- to and just Ken, a questions. ask couple congratulations wanted Maybe of once

characterize own it the parley how index, just down the in Or you do of So due like looks point selling was parlay on inflection that into that to the maybe activity? mainly it ticked quarter, also the efforts kind your in Or an was volumes? market? of

Kenneth Lane

that a we I have Thanks, of Arun. are market mean, levels tighter which we well. than you talked believe. the low, reflection very is believe around low as is listen, inventory people industry I the our that that's caustic about, and what is can tell

of volumes. little And adjustment an at so you're a those there seeing bit parlay

with much the careful portfolio but be to those market things reflected are just our more that based we for on parlay seeing right? caustic. think And do because are So in And than that you're what tighter going volumes around I that's that broad see being move moves, -- volume.

Arun Viswanathan

that for that just then -- or kind starting plus, Epoxy a be next there improvement? better? hit would Is million normal to given that EBITDA, chlor you a the be alkali you order second-half And that would to fair indication And with I Great. there are half can $XXX require my materially the level? also be get an of million. get more you the approaching that do will maybe Would half guess only on second $XXX will point year? volumes $X.X concern expectation exiting of the Or first that really billion be, mainly

Kenneth Lane

talking that how would happen out A lot that develops. thanks, going about global that start of out we've economy amount it's happen how Arun. are with even plays the going in what's be world say mean to now I the need between to would things quarter. I not prudent, Yes, and fourth We and got see uncertainty today far -- of right? to the that the Listen, to

the But improvement are in term, short seeing demand. again, in we

what like. really too it's on that, make to might calls look Beyond first next half any year early the of

Arun Viswanathan

I And quick then one Okay. could. if one,

million that kind the that? we $XXX what's maybe frame assume million this buybacks should in year, of Just of to or comfortable $XXX actually a for floor the shareholder range on returns,

Kenneth Lane

steady mean, prediction we'll I'm to anything our Well, I shares. said give that? purchase. you any not on want we that of we've to add the a -- would previously we Todd, what be Do now you is to buyer amount going

Todd Slater

And purchases the our really we we did in pay. saw forecast, free the you You assumptions. primary a levered quarter, that your flow flow given Arun. we're But used, million. steady cash level use to other free cash would levered a dividend our that regular expect first than of $XXX can roughly own that's make of buyer, That's where you be

Operator

Our Sison question Mike from comes from Wells next Fargo.

Michael Sison

Ken, Nice the start year, to onboard. welcome

and curious, what you a EBITDA how what peak earnings Just levels or it and might can get sort have thoughts to EBITDA know those and think be early you Olin's about I potential you maybe maybe potential, comment, mid-cycle of or bit of any if where little to? get EBITDA do there but could

Kenneth Lane

now, elaborate is in in Olin Thank I give view but very don't a trough a cycle, would really the on to see. to get durable. been is I we of when successful the is Investor at peak, you, resetting we're level -- have that year, this which that prior at maybe don't Day point. this we'll for to later we I -- mid-cycle Olin. right Mike. nothing our will have do I and you And now believe that that terms the say Listen, is what has great and Where I above

Michael Sison

in right? XQ of follow-up the joking. XQ so forward million. doesn't sound setup I'm year, versus you'll sounds a it it first sort be the Understood. than terms of if of -- half like Day in No, But step-up sort that the to looking the for $XXX Yes, is XQ of the versus second Analyst in above and -- fourth better Cleveland, fourth, versus the

[ the I what know of so in you a you us for the [ But the to or guess to won't full specific part rate operating is, ] second year? half do to I of need EBITDA get question sort get much-higher level do give to that the ] X.X guidance. to

Kenneth Lane

see the year. some going for going Well, think Epoxy again, rates, the important be to But chlor demand rate, the about than the see don't We're our that to in on to improve I to but come there's need play. operating There as that the improve want to we just see the will We're obviously, year. rates business is through about. forget we Winchester role know focus more alkali continue operating going operating back. we that through to increase

So it's more operating rate. just than focusing on that

adjust will is our we operating match low, only see. demand if year. of the level to We with the rate But step operating one up. the will half in equation higher get the inventories rates to that's the back that And being coming the demand obviously, part that of back to

Operator

Blair comes next from Our TPH. Matthew from question

Matthew Blair

which side? end are and Congrats, on Could Ken. more I more There's a on just on seeing. markets then, commentary and you're that you provide stronger markets relatively and about thinking paper, relatively positive areas guess, any been lot construction of color alumina are which pulp [ just weaker, the end ] demand like trends the

Kenneth Lane

would agriculture, we're which go Well, of Yes. not markets. into dioxide, the seeing lot polyurethanes, prepared said like the improvement demand yet in that are improving is I area end remarks, a the different say, in we've around titanium we seeing in construction. general,

That's businesses. a driver very big for our

we market seeing like China improvement big I'll improvement what comment, energy, wind happening is to So to us and not in we're just to some China. that construction, market in there. is and we're And going yet. related But things see a start that see for and electronics even

There need start some in in commodity to for of grow And to improved that improvement more. there have been improvements small China structural see our us really very yet. to anything China, see see we a some but seeing we're not flows, global we

So happening we're closely, watching very that's in market. is still that what's something

Matthew Blair

are does QX? help -- the at prices EDC the why play? QX versus that And a guess, little bit explain there numbers lower in Okay. dynamics I in construction, tepid are spot Or other

Kenneth Lane

I'm sorry, prices? what said spot you

Matthew Blair

Spot EDC.

Kenneth Lane

sorry, follow EDC, Yes. saying. what didn't you were Okay. I I'm

to the into first just not going to was previously. we are to I operations operating is improvement saw market as that in some was our there. necessarily saw of strong that and and of trying So the a think normal pricing We get what level what But adjust in normalize [ some I quarter, the as ]. producing offsets assets portfolio pushed an there getting as think thought upswing volume back that's not actually because for

Operator

from Kevin Our Vertical next comes question from Research Partners. McCarthy

Kevin McCarthy

favorable Thank question relates Ken, hear voice Good as you. energy. been gas prices well. your per very natural welcome. MMBtu. lately have And to to My $X south Obviously, of

To degree about talk about how have moving exposure trend, we positioning? Or floating prices? forward? more Olin's or think in hedge you these you values ECU low what Can freely may as the margins be might locked

Kenneth Lane

Thank you, Yes. Kevin.

So about talked we've this before.

is high tend hedge down in hedge pretty we Our the X next current strategy quarter, gradually in will percentage the step then that quarters. a and to

quarter, in in a that terms of in So the -- we do were first percentage portfolio, of hedged were the continue to we our quarter. and very we highly second

today market. won't you benefit the we So lower see energy as prices that see in the much in

on do our really see the that, of some see. but hedging to to shocks of you avoid strategy the want to and peaks you is add will pain that? Todd, We the that

Todd Slater

that chlor saw alkali you of Yes, from QX, should continue into Kevin, favorable and cost QX that we Part power. as expect you QX. to to had includes

on even system favorable basis, we not into power flow but hedger, flow though through perspective. necessarily our the our lower So cost a will and from system, spot gas cost will albeit natural a are a prices

Kevin McCarthy

That's commentary I to clarify wanted free cash Okay. then, of levered around some And Todd, the helpful. flow. very

$XXX at last I quarter. think you were million

than you Sounds agreement. long-term did that, a XXX, energy you're and tax out and if timing correctly, tracking like, to maybe little bit closer heard my math less I call I maybe

guess change in has X would normal drivers last what my forth? any And so cash and kind months? I free I changed exactly flow, the capital call CapEx there X questions over be, and working been or of what as would of such the

Todd Slater

$XX be Coast assumption think contract we payments flow that we where our were going did levered we Kevin, free thought slight really, from page, power a have million. spend change virtually to the a We the unchanged. assumptions are amount on the total to perspective, said cash I Gulf in

and Now doing that is to person the we have pay, that, too.

for relatively now a final have We XXXX. number

think to had that's before. $XX be million. to We going estimated that So million million $XX we $XX

the that, substantive think to our I cash levered we'll outlook any was than Other at in come free don't So high changes end. flow. there on

Operator

from comes Morgan Stanley. from Vincent question next Our Andrews

Vincent Andrews

Ken, And year? already that just If little for very advance? things. any bit specific getting you coming well orders driving of congrats the end deserved. on in color you And two from you're Are One, half back they could markets? ask what's that I the could you, to far give the so a more

could about Gabriel for just there tension I of is operating reliable issues. if you periods in costs? and down be sort them of ask ] then without of In the risks operator plants just any of any St. wanting having And online [ back time extended terms and coming secondly, a general, to in between incremental easily maintenance

Kenneth Lane

Vincent, thank you.

even We're markets orders the that we listen, the had now we're actually see. restart. to half of customers looking So have that second who terms in broad the assets in seeing are that seeing some are end pretty

it's So us which place good seeing just It's terms pretty confidence some gives about. we're we're one that uptick demand broad, in pretty that. of that not that talking

question topics your get reliability St. in around Gabriel. I the

to do them. we run. the that available what we operate will with need We And when took will you've that happen they we need And when want it first. they safely have to what Gabriel. that's We down. run, to assets seen St. And to need do means

focus continue that commitment of asset what in We around do many visiting that, the will the asset, really the to doing to we're is U.S., seen chlor alkali sure of the operate, that. need site. and when the we with operating to it the sites, to that that safely that make do and one operate. And on was traveling our visited to we and sites have I've strong restarted but to have I've assets, just to of impressed condition things the going I

ready that be and the to continue team to the operate to we So very be our the demand and happy able with we I'll support need need. and level manufacturing value assets at that,

Operator

Our from Research. question from Frank Mitsch comes Fermium next

Frank Mitsch

me let to congrats, reconnect. Yes, my echo nice Ken,

quarter, in was a up system. but of consultants, things to prices chlorine bit, interesting down little according in One ticked it your the first the the is

that interplay about up the to that contract between understand chlorine of talk resets. in for I chlorine prices system? the So maybe and be maybe that you led Can some resets contract Olin pricing other

Kenneth Lane

Yes. meet and demand question, that you basically good that the what system. don't that I look at tell operate, we model the I those the in put reconnect. you to how I want, Thanks, at operate we will Frank. appreciate the we value we I have just Listen, that's have. know And our faith lot in to of a indices. I don't. we

products. the the weak the that we'll that's change. going value, going at value continue to going to away make on get the we what that's result, the are We're is We're that the the focus for ECU. focusing not numbers not on to you to products produce, sure that going and matching we the demand give and us. side our right ones see of in We're to And for be

Frank Mitsch

the not construction any half a forth. recovery -- markets so $X.X CMA that coming and C a there in seeing back [ ], then [ I have The in out also B chlorine did just -- of use. were you and ] Terrific. measure on Do billion of and about the have -- And mean guess talk you you follow-up XXXX, recovery the in great. heard end do et for and ISIS year? you the any of cetera big

interest the -- full-year general. about going And your about is guide you talk Can I I obviously, concerned aren't people construction rates may to what reason soon, not are ask guess be that so of cut in why from be markets? how may into the embedded is flavor those month anytime or the

Kenneth Lane

for any there. we're Yes. recovery I of mean, listen, baking significant no, kind not in construction,

-- just that would any us and housing see housing You optimism in you in support we purpose, the momentum in look at and the the baking that market. starts don't

like signs that see areas lot is broad-based we a consumer-driven of different I construction one So say I yet. of those of demand wouldn't said with more really, it's a earlier, of hope but in,

Operator

next Bank Our from Spitz from Roger America. of question comes

Roger Spitz

When for XXXX? flow before I earlier, less yield and Do $XXX cash would flow cash that you of are dividends circa free correctly? you million understand that said operating CapEx the saying be XX%,

Kenneth Lane

take do to you want Todd, that?

Todd Slater

specifically said XX% is Yes. Roger, with consistent when free in been for cash that's we as yield, our -- that, the price levered metric using. which today. flow with we've talk And range a the year, the than we that higher maybe I little we the sit would say probably

Roger Spitz

at of you're I'm lower in and XXXX. quarter XX, being secondly, of looking where on And half cost first Okay. quarter the stronger showing side right, first Slide -- the second

falling. sequentially. actually I on to Next maybe caustic the soda the I side when don't stronger it presentation, caustic fully is down guess, that it's understand showing is pricing

Kenneth Lane

Well, again, relative. this is

it think see chlorine in can't in what about versus to It's You we market relative terms. absolute caustic momentum.

market actually very I caustic momentum hours some in seen actually [ seen more starting are ] are chlorine. caustic, where recovery positive. have be pricing before, talked low. to see just about we're We and inventory We've in levels up this low, moving

a still it's perspective, our side. weaker from chlorine So

Operator

comments. this back to further like in gentlemen, to Ken will question-and-answer the call for over conclude conference session. closing Lane I'd ladies and questions, showing And no our turn

Kenneth Lane

very in wish today. weekend. all much, relaxing thank and you call you a participating Well, you the for Jamie, all I and safe thank

Operator

gentlemen, thank you attending for presentation. and Ladies today's

You lines. may now disconnect your

Olin (OLN) 26 Apr 242024 Q1 Earnings call transcript