Tronox Reports Second Quarter 2021 Financial Results

Second Quarter 2021 Financial Highlights:
*Record revenue of $927 million increased 4 percent sequentially, driven primarily by 5 percent higher TiO2 average selling prices and 5 percent higher zircon average selling prices
*Income from operations of $150 million; Net income of $77 million
*GAAP earnings per share of $0.46; Adjusted diluted EPS of $0.61 (Non-GAAP); the difference is due to second quarter debt extinguishment costs
*TiO2 sales volumes increased 1 percent sequentially, driven by continued recovery led by North America and Europe
*Zircon sales volumes continue to be very strong, but declined 5 percent sequentially from record first quarter levels as expected

Strong Financial Position and Cash Flow:
*Generated a record $150 million in free cash flow in the second quarter after investing $60 million in capital expenditures
*Continued deleveraging with debt repayments of $135 million in the second quarter and $70 million completed in July for a total of $205 million, reducing total debt to $2.8 billion

Tronox achieved another record quarter of TiO2 volumes and key financial metrics including revenue, EPS, Adjusted EBITDA, and free cash flow. Second quarter revenue increased 4 percent sequentially, primarily driven by higher TiO2 and zircon average selling prices. TiO2 sales volume grew 1 percent sequentially led by growth in North America and Europe. Increases in TiO2 selling prices in all regions resulted in a 5 percent sequential improvement globally. Revenue from zircon sales decreased 2 percent sequentially, as improved pricing was partially offset by lower volumes, as expected. Tronox delivered Adjusted EBITDA of $237 million, another record achievement for the company. Adjusted EBITDA margin was 26 percent.

Commenting on these results, John D. Romano, co-chief executive officer, stated, “Jean-François and I are pleased with our solid second quarter performance, which was in line with the guidance we issued in April. TiO2 volumes came in within the range, albeit at the low end, mainly due to supply chain challenges that limited vessel and container availability at a time when inventories were already at abnormally low seasonal levels. We successfully implemented planned regional pricing initiatives for both TiO2 and zircon, offsetting headwinds from unfavorable foreign exchange rates, inflationary pressures, and operational disruptions that we foreshadowed on our first quarter earnings call. This included EBITDA headwinds of $10 million from the planned maintenance shutdown of our synthetic rutile production facility and $4 million from longer than anticipated downtime at our Botlek pigment plant due to an extended supplier shutdown, as well as $5 million from unexpected downtime at our Stallingborough pigment plant due to mechanical issues, each of which will roll off in the third quarter.”
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