Tronox(TROX) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the first quarter of 2025 were $738 million, a decrease of 5$774 million in the same period of 2024, primarily due to lower sales volumes and average selling prices of TiO2 and zircon[113]. - TiO2 revenue decreased by 3% or $21 million year-over-year, driven by a 1$7 million[114]. - Zircon revenue decreased by 22% from the first quarter of 2024 to the first quarter of 2025, primarily due to a 15% decrease in sales volumes and a 7% decline in average selling prices[110]. - Gross profit for the first quarter of 2025 was $99 million, representing a gross margin of 13.4$111 million for the first quarter of 2025, compared to a net loss of $9 million in the prior year, with net loss as a percentage of net sales increasing to 15.0$112 million, down from $131 million in the same period of 2024, with adjusted EBITDA as a percentage of net sales at 15.2$24 million, compared to an adjusted net loss of $7 million in Q1 2024[164]. - Diluted net loss per share for Q1 2025 was$(0.70), significantly higher than $(0.06) in Q1 2024[164]. - Net loss for Q1 2025 was$111 million, compared to a net loss of $9 million in Q1 2024, representing a net loss as a percentage of net sales of (15.0)$443 million, including $138 million in cash and cash equivalents and$305 million available under revolving credit agreements[111]. - Total debt as of March 31, 2025, was $3.0 billion, with a net debt to trailing-twelve month adjusted EBITDA ratio of 5.2x[111]. - At March 31, 2025, the company's total debt was$3.0 billion, with net debt of $2.8 billion after accounting for cash and cash equivalents[135]. - The company's total outstanding principal balance on short-term debt facilities was approximately$212 million as of April 28, 2025[136]. - Working capital was $1.2 billion as of March 31, 2025, down from$1.3 billion at December 31, 2024[125]. Cash Flow - Cash used in operating activities increased to $32 million in Q1 2025 from$29 million in Q1 2024, primarily due to a decrease in income-related cash generation[144]. - Net cash used in investing activities was $95 million in Q1 2025, up from$76 million in Q1 2024, driven by higher capital expenditures of $110 million[145]. - Net cash provided by financing activities was$108 million in Q1 2025, compared to cash used of $12 million in Q1 2024, mainly from net proceeds of$115 million from short-term debt[146]. Restructuring and Charges - Restructuring and other charges for the first quarter of 2025 amounted to $86 million, primarily related to the idling of the Botlek plant[113]. - The company experienced restructuring and other charges of$86 million in Q1 2025, primarily related to the Botlek plant idling[164]. Customer Concentration - The company’s ten largest third-party customers represented 39% of consolidated net sales in Q1 2025, up from 37% in Q1 2024[170]. Interest Rate and Currency Management - A hypothetical 1% increase in interest rates would result in a net decrease to pre-tax income of approximately $9 million on an annualized basis[171]. - The company entered into two new interest-rate swap agreements for a total notional value of$250 million, effective September 30, 2024, to manage interest rate volatility[173]. - As of March 31, 2025, the Company has $950 million in interest rate swaps, with$450 million maturing in March 2028 and $500 million maturing in September 2031, aimed at stabilizing interest expenses and managing interest rate exposure[175]. - For the three months ended March 31, 2025, the interest expense related to interest-rate swap agreements was$2 million, a decrease from $8 million for the same period in 2024[176]. - The Company aims to manage currency risk arising from fluctuations in foreign exchange rates, particularly in markets like South Africa and Australia, where revenues are primarily in U.S. dollars[178]. - The Company uses forward contracts and zero-cost collars as economic hedges for foreign currency transactions, particularly for its South African and Australian subsidiaries[179]. - As of March 31, 2025, the Company had notional amounts of 404 million Australian dollars (approximately$252 million) in foreign currency contracts to hedge against fluctuations in currency rates for its Australian subsidiaries' cost of sales[179]. - The Company has outstanding foreign currency contracts totaling approximately $71 million in South African Rand,$86 million in Australian dollars, $34 million in Pound Sterling,$60 million in Euro, and $39 million in Saudi Riyal as of March 31, 2025[180]. - The amounts recorded in interest expense related to interest-rate swap agreements included less than$1 million reclassified from "Accumulated other comprehensive loss" for the three months ended March 31, 2025[176]. - The Company recorded a net unrealized gain of $10 million in "Accumulated other comprehensive loss" as of March 31, 2025, expected to be recognized in earnings over the next twelve months[179]. - The net unrealized gain recorded in "Accumulated other comprehensive loss" was$11 million as of March 31, 2025, compared to a net unrealized gain of 26 million as of December 31, 2024[176]. - The Company had no outstanding amounts to reduce the exposure of its South African subsidiaries' third-party sales to fluctuations in currency rates as of March 31, 2025[179]. Credit Rating - The company's credit rating with Moody's changed to a negative outlook as of March 31, 2025, while S&P maintained a B positive rating[129]. Contractual Obligations - Contractual obligations as of March 31, 2025, totaled 8.02 billion, including long-term debt and lease financing of $3.78 billion[147].