Tronox Holdings plc (NYSE:TROX) (“Tronox” or the “Company”), the world’s leading integrated manufacturer of titanium dioxide pigment, today released selected preliminary unaudited financial results for the quarter ending March 31, 2020 and provided an update on its business.

• Revenue expected to be $722 million⁽¹⁾
• Adjusted EBITDA expected to be $172 million⁽¹⁾⁽²⁾ (Non-GAAP)
• Adjusted EPS expected to be between $0.20 and $0.26⁽¹⁾⁽²⁾ (Non-GAAP)
• Solid balance sheet and broad flexibility to manage cash flows

Jeffry N. Quinn, Chairman and Chief Executive Officer of Tronox commented,

“I am very pleased with Tronox’s strong first quarter 2020 results, which came in above consensus and our previously issued guidance despite the onset of the COVID-19 pandemic in the latter part of the quarter.  We expect first quarter revenue of $722 million, in-line with first quarter 2019 revenue pro forma for the Cristal transaction, and Adjusted EBITDA of $172 million, an increase of 22 percent over first quarter 2019 pro forma Adjusted EBITDA of $141 million.  We expect Adjusted EPS to be between $0.20 and $0.26.  We will report our full financial results as planned in early May. 

“We continue to prioritize the safety, health and well-being of our employees and their families while preserving and protecting our business.  Our operations have been designated as essential to support the continued manufacturing of products such as food and medical packaging, medical equipment, pharmaceuticals, and personal protective gear.  All of our sites are currently running to planned production levels, excluding South Africa where we elected to leverage our inventories on hand and not operate our mines and concentrators and run our smelters at a near-full rate with a reduced workforce through the initial 21-day countrywide lockdown period.  In the coming days, we expect to restart our mines and concentrators.

“Our balanced geographic sales, vertically integrated business model with operations across six continents and integrated business planning capabilities enable us to rapidly respond to changing regional market conditions.  Demand for TiO₂ in North America has been the most resilient, as we benefit from our exposure to do-it-yourself coatings and packaging applications.  Regions hit hardest by the virus have experienced lower than normal demand, but we are seeing signs of certain markets picking back up in areas within Europe.  Asia Pacific remains mixed, with China continuing to show strength, while we continue to monitor the developments in countries such as India.  Based on our current forward order book, we expect our TiO₂ volumes in the second quarter to be only 4-7 percent below the volumes we achieved in the first quarter, which were up 7 percent from the fourth quarter last year.  We are monitoring the changing market conditions daily but continue to believe that Tronox is well positioned to meet the challenges of the current situation.  Zircon demand remains mixed, with demand recovering in China offset by weaker demand in Europe.  Zircon volumes for the first quarter were in-line with fourth quarter 2019 volumes.

“Our balance sheet is strong.  As of March 31, 2020, our total available liquidity was $570 million, including $419 million in cash and cash equivalents and $151 million available under revolving credit agreements including $123 million available under our ABL facility.  Our total debt was $3.2 billion and net debt to trailing-twelve month Adjusted EBITDA pro forma for the Cristal transaction was 3.9x.  There are no upcoming maturities on the Company’s term loan or bonds until 2024.  The Company also has no financial covenants on its term loan or bonds and only one springing financial covenant on its ABL facility, which we do not expect to be triggered in any scenario.

“We are proactively managing our cash flow through cost reductions, harvesting of working capital, and reducing capital expenditures by at least $50 million.  We have ample levers available to ensure sufficient cash across a wide range of economic scenarios.

“We continue to run our operations according to plan with the ability to adjust accordingly to address shifting circumstances.  Our unique integrated business planning capabilities enable us to optimize our business at each step of our value chain.  We are working diligently across our global network to operate safely and supply our customers and ensure we are prepared to fully participate in the economic recovery to come.”

Mr. Quinn concluded, “One week ago today, we celebrated the one-year anniversary of the closing of the Cristal acquisition.  A year ago, we did not anticipate the circumstances we are facing today; however, we are finding that as a combined company, the New Tronox is far more resilient and able to weather the storm with substantially more flexibility and strength, providing us the ability to continue executing on our strategy to enhance our position as the leading vertically integrated TiO₂ producer.”

First Quarter 2020 Earnings Release and Webcast Conference Call

Tronox will report full financial results for the first quarter 2020 on Wednesday, May 6, 2020 and will conduct a webcast conference call on Thursday, May 7, 2020 at 8:30 a.m. ET (New York).

Source: Tronox

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