Tronox Reports Second Quarter 2022 Financial Results

Second Quarter 2022 Financial Highlights:
*Produced revenue of $945 million, an increase of 2% compared to the prior year, driven by higher revenue from TiO2
*Generated income from operations of $190 million and net income of $375 million, inclusive of a reversal of a portion of the valuation allowance in Australia relating to deferred tax assets resulting in a non-cash benefit of $262 million
*Achieved GAAP diluted EPS of $2.37; adjusted diluted EPS of $0.84 (non-GAAP) primarily due to the exclusion of the Australian valuation allowance reversal of $1.65
*Delivered Adjusted EBITDA of $275 million, slightly above the midpoint of guidance, and an Adjusted EBITDA margin of 29.1%, representing an improvement of 350 basis points year-over-year
*Invested $99 million in capital expenditures, primarily in our newTRON and vertical integration initiatives
*Repurchased $25 million or approximately 1.5 million shares during the second quarter; total share repurchases of $50 million year-to-date

Co-CEOs’ Remarks
“We are pleased with Tronox’s performance in the second quarter and our employees’ dedication to delivering on our commitments,” commented John D. Romano, co-chief executive officer. “The Company achieved a record Adjusted EBITDA of $275 million, slightly above the midpoint of our guided range, and an Adjusted EBITDA margin of 29.1%, exceeding expectations and improving 350 basis points year-over-year, owing to improved pricing and favorable product mix. This marks the twenty-first consecutive quarter in which Tronox has delivered an Adjusted EBITDA margin above 20%, evidence of the strength and resilience of our business. On a trailing twelve-month basis, Tronox achieved an Adjusted EBITDA of $1 billion, another demonstration of our earnings potential and a testament to the benefits of our vertically integrated business model.”

Mr. Romano continued, “Pricing across all products continued its upward trajectory in the second quarter, as a result of continued execution of our commercial pricing strategy. Demand remained solid in the quarter, though TiO2 volumes came in slightly below our expectations due to ongoing supply chain challenges across all regions. As we enter the second half of the year, despite changing macroeconomic conditions and increasing inflation, we continue to project solid financial performance through strong execution and operating agility. At this stage we continue to see steady demand across the majority of our end markets, though we expect demand in Asia Pacific and Europe to remain dynamic. Notwithstanding, we are confident in Tronox’s position and ability to deliver for our customers given our integrated business model and global footprint that allow us to quickly adapt to changing market conditions.”

Jean-François Turgeon, co-chief executive officer, added, “As we emphasized at our Investor Day in June, we are committed to driving continued value creation through our capital allocation strategy. The investments we make today in key projects, including newTRON and the mining development projects in Australia and South Africa, support our future growth and profitability and are critical to ensuring we remain competitive across all economic scenarios while enabling improved return on capital. In addition, we have returned $91 million to shareholders year-to-date, through $50 million in share repurchases and $41 million in dividend payments. We expect to continue share repurchases under the remaining ~$250 million program through February 2024 as cash generation permits.”

Mr. Turgeon concluded, “We are proactively monitoring the macroeconomic environment. We have ample levers available to ensure sufficient liquidity under any conceivable scenario. We remain focused on executing the strategy we detailed at Investor Day and delivering on our commitments. Our business has never been stronger, and we are confident we will continue to demonstrate the value of our vertically integrated business model and deliver safe, quality, low-cost, sustainable tons for our customers.”
https://www.tronox.com/tronox-reports-second-quarter-2022-financial-results/