Tronox Reports Third Quarter 2024 Financial Results
STAMFORD, Conn.,
Third Quarter 2024 Financial Highlights:
- Produced revenue of
$804 million , a 21% increase compared to the prior year, or a 2% decrease compared to the prior quarter - Generated income from operations of
$54 million , and a net loss of$25 million ; adjusted net loss was$21 million (non-GAAP) - GAAP diluted loss per share was
$0.16 ; Adjusted diluted loss per share was$0.13 (non-GAAP) - Delivered Adjusted EBITDA of
$143 million and an Adjusted EBITDA margin of 17.8% (non-GAAP) - Invested
$101 million in capital expenditures in the quarter, primarily in the previously announced mining extension projects inSouth Africa - Returned
$61 million to shareholders in the nine months endingSeptember 30, 2024 in the form of dividends
Q4 2024 Outlook:
- TiO2 volumes expected to decline approximately 10-15% compared to Q3 2024 (flat to mid single-digit increase compared to Q4 2023)
- Zircon volumes expected to be flat to slightly down compared to Q3 2024 (double-digit increase compared to Q4 2023)
- Adjusted EBITDA expected to be
$120-135 million and Adjusted EBITDA margin to be in the high-teens
This outlook is based on Tronox's views on current global economic activity and is subject to changes and impacts associated with the macroeconomic conditions, global supply chain, and inflation-related challenges, among others.
Note: For the Company's guidance with respect to fourth quarter 2024 non-GAAP measures, we are not able to provide without unreasonable effort the most directly comparable GAAP financial measure, or reconciliation to such GAAP financial measure, because certain items that impact such measures are uncertain, out of the Company's control or cannot be reasonably predicted.
Summary of Select Financial Results for the Quarter Ending |
||||||
($M unless otherwise noted) |
|
Q3 2024 |
Q3 2023 |
Y-o-Y % ∆ |
Q2 2024 |
Q-o-Q % ∆ |
Revenue |
|
|
|
21 % |
|
(2) % |
TiO2 |
|
|
|
10 % |
|
(6) % |
Zircon |
|
|
|
124 % |
|
(13) % |
Other products |
|
|
61 % |
|
39 % |
|
Income from operations |
|
|
|
69 % |
|
(29) % |
Net (Loss) Income |
|
( |
( |
n/m |
|
n/m |
Net (Loss) Income attributable to |
( |
( |
n/m |
|
n/m |
|
GAAP diluted (loss) earnings per share |
( |
( |
n/m |
|
n/m |
|
Adjusted diluted (loss) earnings per share |
( |
( |
n/m |
|
n/m |
|
Adjusted EBITDA |
|
|
|
23 % |
|
(11) % |
Adjusted EBITDA Margin % |
|
17.8 % |
17.5 % |
30 bps |
19.6 % |
(180) bps |
Free cash flow |
|
( |
( |
n/m |
|
n/m |
|
|
|
|
|
|
|
|
Y-o-Y % ∆ |
Q-o-Q % ∆ |
||||
|
Volume |
Price / Mix |
FX |
Volume |
Price / Mix |
FX |
TiO2 |
12 % |
(2) % |
0 % |
(7) % |
1 % |
0 % |
Zircon |
134 % |
(10) % |
— |
(12) % |
(1) % |
— |
CEO's Remarks and Outlook
Chief Executive Officer
"On operations, we successfully achieved our targeted average production utilization rate of ~80% for the quarter. However, we have not yet seen the benefit of the lower cost inventory flowing through due to weaker than forecasted demand. The impacts from a weaker market environment along with higher freight costs drove the miss relative to our previously guided range of
Third Quarter 2024 Results
(Comparisons are to prior year (Q3 2024 vs. Q3 2023) unless otherwise noted)
The Company recorded third quarter revenue of
Revenue from TiO2 sales was
Zircon revenue increased 124% to
Revenue from other products was
Net loss attributable to
Adjusted EBITDA of
Sequentially, Adjusted EBITDA decreased 11% due to headwinds from higher production costs, exchange rates, and freight costs, partially offset by tailwinds from higher sales volumes and product pricing and mix impacts.
The Company's selling, general and administrative expenses were
Balance Sheet, Cash Flow and Capital Allocation
Free cash flow for the quarter was a use of
Webcast Conference Call
Internet Broadcast:
http://investor.tronox.com
Dial-in Telephone Numbers:
International: +44 80 0279 7040
Conference ID: 99615
Conference Call Presentation Slides will be used during the conference call and made available on our website: http://investor.tronox.com
Conference Call Replay: Available via the internet and telephone beginning on
Internet Replay:
http://investor.tronox.com
US Toll Free: +1 (888) 660-6264
International: +44 20 8609 4320
Replay Access Code: 99615 #
About
Cautionary Statement about Forward-Looking Statements
Statements in this release that are not historical are forward-looking statements within the meaning of the
Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, synergies or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward-looking statements, whether because of new information or future developments.
Use of Non-GAAP Information
To provide investors and others with additional information regarding the financial results of
Investor Relations and Media Contact: Jennifer Guenther
+1.646.960.6598 (Investor Relations)
+1.203.705.3701 extension: 103701 (Media)
|
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ( |
|||||||
(UNAUDITED) |
|||||||
(Millions of |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net sales |
$ 804 |
|
$ 662 |
|
$ 2,398 |
|
$ 2,164 |
Cost of goods sold |
676 |
|
568 |
|
2,000 |
|
1,780 |
Gross profit |
128 |
|
94 |
|
398 |
|
384 |
Selling, general and administrative expenses |
74 |
|
62 |
|
227 |
|
206 |
Income from operations |
54 |
|
32 |
|
171 |
|
178 |
Interest expense |
(42) |
|
(42) |
|
(126) |
|
(113) |
Interest income |
3 |
|
4 |
|
9 |
|
10 |
Loss on extinguishment of debt |
(3) |
|
— |
|
(3) |
|
— |
Other (expense) income, net |
(11) |
|
— |
|
7 |
|
6 |
Income (Loss) before income taxes |
1 |
|
(6) |
|
58 |
|
81 |
Income tax provision |
(26) |
|
(8) |
|
(82) |
|
(339) |
Net loss |
(25) |
|
(14) |
|
(24) |
|
(258) |
Net (loss) income attributable to noncontrolling interest |
— |
|
— |
|
(6) |
|
2 |
Net loss attributable to |
$ (25) |
|
$ (14) |
|
$ (18) |
|
$ (260) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
Basic |
$ (0.16) |
|
$ (0.09) |
|
$ (0.11) |
|
$ (1.66) |
Diluted |
$ (0.16) |
|
$ (0.09) |
|
$ (0.11) |
|
$ (1.66) |
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic (in thousands) |
158,095 |
|
156,816 |
|
157,811 |
|
156,260 |
Weighted average shares outstanding, diluted (in thousands) |
158,095 |
|
156,816 |
|
157,811 |
|
156,260 |
|
|
|
|
|
|
|
|
Other Operating Data: |
|
|
|
|
|
|
|
Capital expenditures |
101 |
|
54 |
|
253 |
|
202 |
Depreciation, depletion and amortization expense |
70 |
|
67 |
|
214 |
|
206 |
|
|||||||
RECONCILIATION OF NON- |
|||||||
(UNAUDITED) |
|||||||
(Millions of |
|||||||
|
|
|
|
|
|
|
|
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO TRONOX HOLDINGS PLC ( |
|||||||
TO ADJUSTED NET (LOSS) INCOME ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON- |
|||||||
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Net loss attributable to |
$ (25) |
|
$ (14) |
|
$ (18) |
|
$ (260) |
|
|
|
|
|
|
|
|
Sale of royalty interest (a) |
— |
|
— |
|
(21) |
|
— |
Loss on extinguishment of debt (b) |
3 |
|
— |
|
3 |
|
— |
Tax valuation allowance (c) |
— |
|
— |
|
16 |
|
293 |
Other (d) |
1 |
|
2 |
|
4 |
|
3 |
Adjusted net (loss) income attributable to |
$ (21) |
|
$ (12) |
|
$ (16) |
|
$ 36 |
|
|
|
|
|
|
|
|
Diluted net loss per share ( |
$ (0.16) |
|
$ (0.09) |
|
$ (0.11) |
|
$ (1.66) |
|
|
|
|
|
|
|
|
Sale of royalty interest, per share |
— |
|
— |
|
(0.14) |
|
— |
Loss on extinguishment of debt, per share |
0.02 |
|
— |
|
0.02 |
|
— |
Tax valuation allowance, per share |
— |
|
— |
|
0.10 |
|
1.87 |
Other, per share |
0.01 |
|
0.01 |
|
0.03 |
|
0.02 |
Diluted adjusted net (loss) income per share attributable to |
$ (0.13) |
|
$ (0.08) |
|
$ (0.10) |
|
$ 0.23 |
|
|
|
|
|
|
|
|
Weighted average shares outstanding, diluted (in thousands) |
158,095 |
|
156,816 |
|
157,811 |
|
157,053 |
|
|
|
|
|
|
|
|
(1) Only the sale of royalty interest and certain other items have been tax impacted whereas certain other items were not tax impacted as they were recorded in jurisdictions with full valuation allowances. |
|||||||
(2) Diluted adjusted net income per share attributable to |
|||||||
(a) Represents the sale of a royalty interest in certain Canadian mineral properties, net of associated transaction costs included in "Other (expense) income, net" in the unaudited Condensed Consolidated Statements of Operations. |
|||||||
(b) Represents the loss in connection with the refinancing of the Term Loan Facility in the US. |
|||||||
(c) 2024 amount represents the establishment of a full valuation allowance against the deferred tax assets within our Brazilian jurisdiction. 2023 amount represents the establishment of a full valuation allowance against the deferred tax assets within our Australian jurisdiction. |
|||||||
(d) Represents other activity not representative of the ongoing operations of the Company. |
|
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(UNAUDITED) |
|||
(Millions of |
|||
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ 167 |
|
$ 273 |
Restricted cash |
1 |
|
— |
Accounts receivable (net of allowance for credit losses of |
373 |
|
290 |
Inventories, net |
1,482 |
|
1,421 |
Prepaid and other assets |
187 |
|
141 |
Income taxes receivable |
9 |
|
10 |
Total current assets |
2,219 |
|
2,135 |
|
|
|
|
Noncurrent Assets |
|
|
|
Property, plant and equipment, net |
1,938 |
|
1,835 |
Mineral leaseholds, net |
644 |
|
654 |
Intangible assets, net |
247 |
|
243 |
Lease right of use assets, net |
129 |
|
132 |
Deferred tax assets |
874 |
|
917 |
Other long-term assets |
140 |
|
218 |
Total assets |
$ 6,191 |
|
$ 6,134 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ 492 |
|
$ 461 |
Accrued liabilities |
243 |
|
230 |
Short-term lease liabilities |
20 |
|
24 |
Short-term debt |
17 |
|
11 |
Long-term debt due within one year |
34 |
|
27 |
Income taxes payable |
11 |
|
— |
Total current liabilities |
817 |
|
753 |
|
|
|
|
Noncurrent Liabilities |
|
|
|
Long-term debt, net |
2,767 |
|
2,786 |
Pension and postretirement healthcare benefits |
102 |
|
104 |
Asset retirement obligations |
195 |
|
172 |
Environmental liabilities |
41 |
|
48 |
Long-term lease liabilities |
102 |
|
103 |
Deferred tax liabilities |
183 |
|
149 |
Other long-term liabilities |
38 |
|
39 |
Total liabilities |
4,245 |
|
4,154 |
|
|
|
|
Commitments and Contingencies |
|
|
|
Shareholders' Equity |
|
|
|
|
2 |
|
2 |
Capital in excess of par value |
2,080 |
|
2,064 |
Retained earnings |
606 |
|
684 |
Accumulated other comprehensive loss |
(775) |
|
(814) |
|
1,913 |
|
1,936 |
Noncontrolling interest |
33 |
|
44 |
Total equity |
1,946 |
|
1,980 |
Total liabilities and equity |
$ 6,191 |
|
$ 6,134 |
|
|||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||
(UNAUDITED) |
|||
(Millions of |
|||
|
|
|
|
|
|
|
|
|
Nine Months Ended |
||
|
2024 |
|
2023 |
Cash Flows from Operating Activities: |
|
|
|
Net loss |
$ (24) |
|
$ (258) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
Depreciation, depletion and amortization |
214 |
|
206 |
Deferred income taxes |
64 |
|
314 |
Share-based compensation expense |
17 |
|
15 |
Amortization of deferred debt issuance costs and discount on debt |
7 |
|
6 |
Loss on extinguishment of debt |
3 |
|
- |
Other non-cash items affecting net income (loss) |
24 |
|
34 |
Changes in assets and liabilities: |
|
|
|
(Increase) decrease in accounts receivable, net of allowance for credit losses |
(82) |
|
84 |
Increase in inventories, net |
(11) |
|
(141) |
Decrease in prepaid and other assets |
32 |
|
5 |
Decrease in accounts payable and accrued liabilities |
(2) |
|
(154) |
Net changes in income tax payables and receivables |
8 |
|
(5) |
Changes in other non-current assets and liabilities |
(32) |
|
(32) |
Cash provided by operating activities |
218 |
|
74 |
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
Capital expenditures |
(253) |
|
(202) |
Proceeds from sale of assets |
27 |
|
3 |
Cash used in investing activities |
(226) |
|
(199) |
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
Repayments of short-term debt |
(12) |
|
(136) |
Repayments of long-term debt |
(221) |
|
(13) |
Proceeds from long-term debt |
212 |
|
347 |
Proceeds from short-term debt |
- |
|
81 |
Debt issuance costs |
(14) |
|
(3) |
Dividends paid |
(61) |
|
(69) |
Restricted stock and performance-based shares settled in cash for withholding taxes |
(1) |
|
- |
Cash (used in) provided by financing activities |
(97) |
|
207 |
|
|
|
|
Effects of exchange rate changes on cash and cash equivalents and restricted cash |
- |
|
- |
|
|
|
|
Net (decrease) increase in cash and cash equivalents and restricted cash |
(105) |
|
82 |
Cash and cash equivalents and restricted cash at beginning of period |
273 |
|
164 |
Cash and cash equivalents and restricted cash at end of period |
$ 168 |
|
$ 246 |
|
|||||||
RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA, ADJUSTED EBITDA AS A % OF NET SALES AND NET DEBT TO TRAILING-TWELVE MONTHS ADJUSTED |
|||||||
(UNAUDITED) |
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(Millions of |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Net loss ( |
$ (25) |
|
$ (14) |
|
$ (24) |
|
$ (258) |
Interest expense |
42 |
|
42 |
|
126 |
|
113 |
Interest income |
(3) |
|
(4) |
|
(9) |
|
(10) |
Income tax provision |
26 |
|
8 |
|
82 |
|
339 |
Depreciation, depletion and amortization expense |
70 |
|
67 |
|
214 |
|
206 |
EBITDA (non- |
110 |
|
99 |
|
389 |
|
390 |
Share-based compensation (a) |
7 |
|
4 |
|
17 |
|
15 |
Accretion expense and other adjustments to asset retirement |
8 |
|
6 |
|
22 |
|
14 |
Accounts receivable securitization program (c) |
4 |
|
4 |
|
11 |
|
9 |
Foreign currency remeasurement (d) |
8 |
|
(1) |
|
10 |
|
(7) |
Sale of royalty interest (e) |
— |
|
— |
|
(28) |
|
— |
Loss on extinguishment of debt (f) |
3 |
|
— |
|
3 |
|
— |
Other items (g) |
3 |
|
4 |
|
11 |
|
9 |
Adjusted EBITDA (non- |
$ 143 |
|
$ 116 |
|
$ 435 |
|
$ 430 |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
||
|
2024 |
|
2023 |
|
|
|
|
Net sales |
$ 804 |
|
$ 662 |
|
|
|
|
Net loss ( |
$ (25) |
|
$ (14) |
|
|
|
|
Net loss ( |
(3.1) % |
|
(2.1) % |
|
|
|
|
Adjusted EBITDA (non- |
17.8 % |
|
17.5 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net |
$ 2,767 |
|
$ 2,786 |
|
|
|
|
Short-term debt |
17 |
|
11 |
|
|
|
|
Long-term debt due within one year |
34 |
|
27 |
|
|
|
|
(Less) Cash and cash equivalents |
(167) |
|
(273) |
|
|
|
|
Net debt |
$ 2,651 |
|
$ 2,551 |
|
|
|
|
Trailing-twelve month Adjusted EBITDA (non- |
$ 529 |
|
$ 524 |
|
|
|
|
Net debt to trailing-twelve month Adjusted EBITDA (non- |
5.0x |
|
4.9x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents non-cash share-based compensation. |
|||||||
(b) Primarily represents accretion expense and other noncash adjustments to asset retirement obligations and environmental liabilities. |
|||||||
(c) Primarily represents expenses associated with the Company's accounts receivable securitization program which is used as a source of liquidity in the Company's overall |
|||||||
(d) Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany receivables and liabilities |
|||||||
(e) Represents the sale of a royalty interest in certain Canadian mineral properties, net of associated transaction costs included in "Other (expense) income, net" in the unaudited |
|||||||
(f) Represents the loss in connection with the refinancing of the Term Loan Facility in the US. |
|||||||
(g) Includes noncash pension and postretirement costs, asset write-offs and other items included in "Selling general and administrative expenses", "Cost of goods sold" and |
|
||||||
FREE CASH FLOW (NON- |
||||||
(UNAUDITED) |
||||||
(Millions of |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
The following table reconciles cash provided by operating activities to free cash flow for the three and nine months ended |
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|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Six Months Ended
|
|
Three Months Ended |
Cash provided by operating activities |
|
$ 218 |
|
$ 131 |
|
$ 87 |
Capital expenditures |
|
(253) |
|
(152) |
|
(101) |
Free cash flow (non- |
|
$ (35) |
|
$ (21) |
|
$ (14) |
|
||||||||||
RECONCILIATION OF TRAILING TWELVE MONTH NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA (NON- |
||||||||||
(UNAUDITED) |
||||||||||
(Millions of |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Trailing Twelve Month |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income ( |
|
$ (56) |
|
$ (9) |
|
$ 10 |
|
$ (25) |
|
$ (80) |
Interest expense |
|
45 |
|
42 |
|
42 |
|
42 |
|
171 |
Interest income |
|
(8) |
|
(4) |
|
(2) |
|
(3) |
|
(17) |
Income tax provision |
|
24 |
|
11 |
|
45 |
|
26 |
|
106 |
Depreciation, depletion and amortization expense |
|
69 |
|
72 |
|
72 |
|
70 |
|
283 |
EBITDA (non- |
|
74 |
|
112 |
|
167 |
|
110 |
|
463 |
Share-based compensation (a) |
|
6 |
|
6 |
|
4 |
|
7 |
|
23 |
Foreign currency remeasurement (b) |
|
1 |
|
(2) |
|
4 |
|
8 |
|
11 |
Accretion expense and other adjustments to asset |
|
8 |
|
7 |
|
7 |
|
8 |
|
30 |
Accounts receivable securitization program (d) |
|
3 |
|
3 |
|
4 |
|
4 |
|
14 |
Sale of royalty interest (e) |
|
— |
|
— |
|
(28) |
|
— |
|
(28) |
Loss on extinguishment of debt (f) |
|
— |
|
— |
|
— |
|
3 |
|
3 |
Other items (g) |
|
2 |
|
5 |
|
3 |
|
3 |
|
13 |
Adjusted EBITDA (non- |
|
$ 94 |
|
$ 131 |
|
$ 161 |
|
$ 143 |
|
$ 529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents non-cash share-based compensation. |
||||||||||
(b) Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany receivables and liabilities denominated in a currency other than the functional currency of |
||||||||||
(c) Primarily represents accretion expense and other noncash adjustments to asset retirement obligations and environmental liabilities. |
||||||||||
(d) Primarily represents expenses associated with the Company's accounts receivable securitization program which is used as a source of liquidity in the Company's overall capital structure. |
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(e) Represents the sale of a royalty interest in certain Canadian mineral properties, net of associated transaction costs included in "Other (expense) income, net" in the unaudited Condensed Consolidated Statements of Operations. |
||||||||||
(f) Represents the loss in connection with the refinancing of the Term Loan Facility in the US. |
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(g) Includes noncash pension and postretirement costs, asset write-offs, severance expense and other items included in "Selling general and administrative expenses", "Cost of goods sold" and "Other (expense) income, net" in the |
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