Performance surpassed expectations as demand exceeded typical seasonal levels, supported by declining production costs.
Tronox Holdings plc (NYSE:TROX) (‘Tronox’ or the ‘Company’), the world’s leading integrated manufacturer of titanium dioxide (TiO2) pigment, today announced its financial results for the quarter ending March 31, 2024, as follows
First Quarter 2024 Financial Highlights
- Revenue: $774 million, a 13% increase from the previous quarter and a 9% increase year-over-year.
- Income from Operations: $41 million.
- Net Loss: $9 million; adjusted net loss was $7 million (non-GAAP).
- GAAP Diluted Loss per Share: $0.06; adjusted diluted loss per share was $0.05 (non-GAAP).
- Adjusted EBITDA: $131 million, surpassing the guidance of $100-120 million, with an adjusted EBITDA margin of 16.9% (non-GAAP).
- Capital Expenditures: $76 million.
Second Quarter 2024 Outlook
- TiO2 Volumes: Expected to increase by 7-10% compared to Q1 2024.
- Zircon Volumes: Expected to remain flat compared to Q1 2024.
- Adjusted EBITDA: Projected to be $160-180 million with an adjusted EBITDA margin around 20%.
This outlook is based on current global economic activity and may change due to macroeconomic conditions, supply chain issues, and inflation.
Summary of Select Financial Results for Q1 2024
| ($M) | Q1 2024 | Q1 2023 | Y-o-Y % ∆ | Q4 2023 | Q-o-Q % ∆ |
|---|---|---|---|---|---|
| Revenue | $774 | $708 | 9% | $686 | 13% |
| TiO2 | $605 | $560 | 8% | $519 | 17% |
| Zircon | $88 | $72 | 22% | $57 | 54% |
| Other Products | $81 | $76 | 7% | $110 | (26)% |
| Income from Operations | $41 | $62 | (34)% | $8 | 413% |
| Net (Loss) Income | ($9) | $25 | n/m | ($56) | n/m |
| Net (Loss) Income attributable to Tronox | ($9) | $23 | n/m | ($56) | n/m |
| GAAP Diluted (Loss) Earnings per Share | ($0.06) | $0.15 | n/m | ($0.36) | n/m |
| Adjusted Diluted (Loss) Earnings per Share | ($0.05) | $0.15 | n/m | ($0.38) | n/m |
| Adjusted EBITDA | $131 | $146 | (10)% | $94 | 39% |
| Adjusted EBITDA Margin % | 16.9% | 20.6% | (370) bps | 13.7% | 320 bps |
| Free Cash Flow | ($105) | ($172) | n/m | $51 | n/m |
CEO’s Remarks and Outlook
John D. Romano, CEO of Tronox, noted, “Our stronger-than-expected first quarter was driven by lower production costs, reduced supply chain destocking, and demand exceeding seasonal expectations. Revenue increased by 13% from the previous quarter, particularly in TiO2 and zircon, despite a decrease in sales of non-recurring products like ilmenite. The 18% increase in TiO2 volumes from Q4 indicates a potential market recovery, with significant improvements in demand across all regions, especially in EMEA and Latin America.
Operational improvements include higher utilization rates and reduced manufacturing costs, signaling a return to pre-downturn margins. We expect continued market and cost trend improvements, enhancing our earnings power.
For Q2, we anticipate a 7-10% increase in TiO2 volumes and flat zircon volumes. With declining production costs, we forecast an adjusted EBITDA of $160-180 million and an adjusted EBITDA margin of around 20%.”
First Quarter 2024 Results
Revenue for Q1 2024 was $774 million, up 9% year-over-year, driven by higher TiO2 and zircon volumes despite lower pricing. TiO2 sales reached $605 million, an 8% increase due to an 18% volume rise. Zircon revenue rose 22% to $88 million with a 43% volume increase. Revenue from other products increased 7% year-over-year but decreased 26% sequentially due to non-recurring sales of ilmenite and rare earth tailings.
The net loss attributable to Tronox was $9 million, or $0.06 per diluted share. Adjusted EBITDA was $131 million, a 10% decrease due to pricing and mix impacts, but a 39% sequential increase due to higher production volumes and the absence of prior quarter charges.
Tronox ended the quarter with $2.8 billion in total debt and $629 million in liquidity, with no significant debt maturities until 2028. Free cash flow was negative $105 million due to higher working capital needs and capital expenditures of $76 million. The company declared a $0.50 per share annualized dividend for Q1, paid in Q2.
