Tronox Reports First Quarter 2023 Financial Results

Tronox Holdings plc (NYSE:TROX) (“Tronox” or the “Company”), the world’s leading integrated manufacturer of titanium dioxide (“TiO2“) pigment, today reported its financial results for the quarter ending March 31, 2023.

First Quarter 2023 Financial Highlights:
*Produced revenue of $708 million, a decrease of 27% compared to the prior year
*Generated income from operations of $62 million and net income of $25 million
*Achieved GAAP diluted EPS of $0.15; adjusted diluted EPS of $0.15 (non-GAAP)
*Delivered Adjusted EBITDA of $146 million, and an Adjusted EBITDA margin of 20.6%
*Invested $93 million in capital expenditures, primarily in our vertical integration and newTRON initiatives

Co-CEOs’ Remarks
“While this quarter continued to be challenged by softer end-market demand compared to the prior year, we delivered a stronger quarter than expected,” commented John D. Romano, co-chief executive officer. “Sequentially, TiO2 volumes improved 14%, within the previously guided range, and average selling prices improved 1% compared to the prior quarter, or 3% compared to the prior year, despite 30% lower volumes year-on-year. Adjusted EBITDA was $146 million in the quarter, exceeding the top end of our guided range by $16 million, primarily due to favorable exchange rates compared to our forecast, prudent cost and discretionary spend management and lower costs on the volumes sold in the quarter. Tronox’s first quarter financial results are a demonstration of the strength and advantages of our vertically integrated portfolio. Through our investments in vertical integration, we are able to realize a cost advantage and security of supply that is a key differentiator for Tronox. Additionally, we continue to deliver against our commercial strategy and realize favorable pricing trends despite the macro backdrop. I am proud of the Tronox team’s dedication and commitment.”

Mr. Romano continued, “Looking ahead, we expect second quarter pigment volumes to increase in the mid- to high-teens range compared to first quarter 2023, driven by continued demand improvement across all regions.”

Jean-François Turgeon, co-chief executive officer, added, “We continue to focus on managing our costs while utilizing the numerous levers we have available to optimize performance and adapt to market conditions. We are happy to report that our upgrading operations at KZN in South Africa are back to full utilization levels following the fire in the fourth quarter that impacted production rates. Additionally, our Atlas mining operations in Australia are also up and running. We are continuing to work with the local authorities towards being able to utilize the primary roads for hauling material offsite, which we anticipate will occur mid-2023. For the second quarter 2023, we anticipate generating an Adjusted EBITDA of $160-170 million, primarily as a result of improved TiO2 and zircon volumes, partially offset by unfavorable product mix impacts and higher costs at our mining sites including increased energy costs in South Africa and higher hauling costs in Australia. We will continue to balance cash generation while ensuring we have the product necessary to meet our customers’ needs and are effectively positioning Tronox for future success.”
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