Chemours(CC)2024-08-01 21:06Financial Performance - Net sales decreased by $105 million (or 6%) to $1.5 billion for Q2 2024 compared to $1.6 billion in Q2 2023, primarily due to a 6% decrease in price [259]. - For the six months ended June 30, 2024, net sales decreased by $292 million (or 9%) to $2.9 billion from $3.2 billion in the same period in 2023, driven by a 5% decrease in price and a 3% decrease in volume [260]. - Titanium Technologies segment net sales decreased by $34 million (or 5%) to $673 million for the three months ended June 30, 2024, primarily due to a 7% decrease in price [277]. - Thermal & Specialized Solutions segment net sales decreased by $10 million (or 2%) to $513 million for the three months ended June 30, 2024, primarily due to a 4% decrease in price [283]. - Advanced Performance Materials segment net sales decreased by $48 million (or 12%) to $339 million for the three months ended June 30, 2024, primarily due to a 7% decrease in price and a 4% decrease in volume [287][288]. - Performance Solutions portfolio's net sales were $133 million for Q2 2024, down from $140 million in Q2 2023, while Advanced Materials portfolio's net sales decreased from $247 million to $206 million in the same period [290]. - Net sales for the six months ended June 30, 2024, were $1,982 million, with a gross profit of $298 million [326]. Expenses and Costs - Cost of goods sold (COGS) decreased by $1 million (or less than 1%) to $1.2 billion for Q2 2024, and by $107 million (or 4%) to $2.3 billion for the six months ended June 30, 2024 [261]. - Selling, general, and administrative (SG&A) expenses decreased by $640 million (or 82%) to $139 million for Q2 2024, primarily due to litigation-related charges of $592 million recorded in Q2 2023 [262]. - Research and development (R&D) expenses decreased by $2 million (or 7%) to $26 million for Q2 2024, driven by transformation initiatives within the Titanium Technologies business [263]. - Interest expense, net increased by $18 million (or 38%) to $66 million for Q2 2024, primarily due to higher interest rates on variable rate debt and increased debt principal [266]. - Corporate expenses and unallocated items totaled $207 million for the six months ended June 30, 2024, down from $820 million in the same period of 2023 [296]. Cash Flow and Liquidity - Total unrestricted cash and cash equivalents were $604 million as of June 30, 2024, with $432 million held by foreign subsidiaries [298]. - The availability under the Revolving Credit Facility was $852 million as of June 30, 2024, net of $48 million in outstanding letters of credit [298]. - The company incurred a net $895 million usage of cash in operating activities for the six months ended June 30, 2024, compared to a net $57 million usage in the same period of 2023 [301]. - The company accelerated the collection of approximately $128 million of accounts receivable in the first half of 2024, compared to $205 million in the same period of 2023 [303]. - The company received approximately $259 million of net cash in the U.S. through intercompany loans and dividends during the six months ended June 30, 2024 [304]. - Cash used for operating activities increased to $910 million in the first half of 2024, primarily due to the release of $592 million from the qualified settlement fund [313]. - Cash used for investing activities was $171 million in the first half of 2024, mainly for property, plant, and equipment purchases totaling $175 million [314]. Environmental and Sustainability Initiatives - The company aims to achieve ambitious Corporate Responsibility Commitment goals by 2030, focusing on sustainability and long-term earnings growth [254]. - The company is committed to integrating sustainability across its operations and investing in R&D to develop safer and more efficient products [254]. - Chemours aims for a 60% reduction in Scope 1 and Scope 2 absolute GHG emissions by 2030, aligning with its Environmental Leadership goals [359]. - The company has set a new Scope 3 target to reduce emissions by 25% per ton of product by 2030, approved by the Science Based Targets initiative in May 2024 [360]. - Chemours has committed to a 99% or more reduction of air and water process emissions of fluorinated organic chemicals by 2030 [359]. - The company is continuously evaluating market trends and opportunities for low-carbon and energy-efficient products in response to evolving climate-related legislation [361]. - The Chemours Company aims to achieve a goal of avoiding 325 million tons of carbon dioxide equivalent emissions globally by the end of 2025 through its low GWP Opteon™ products [362]. Legal and Regulatory Matters - The company accrued litigation costs of $175 million as of June 30, 2024, which includes a $55 million settlement with the State of Ohio and a $13 million supplemental payment to the State of Delaware [307]. - The Chemours Company anticipates significant cash payments for known contractual obligations, including $580 million for environmental remediation liabilities as of June 30, 2024, with $127 million classified as current [306]. - The company has established an escrow account for potential future legacy PFAS liabilities, with a next escrow payment of $50 million expected by September 30, 2025, and annual payments through 2028 [307]. - The estimated earliest entry into force of PFAS restrictions in the EU is 2025, pending completion of the regulatory process [370]. - Chemours has appealed the EU's decision to list HFPO Dimer Acid as a Substance of Very High Concern, which may lead to future regulatory restrictions [368]. Assets and Liabilities - The Chemours Company reported a decrease in total current assets to $2.937 billion as of June 30, 2024, down from $3.835 billion at December 31, 2023 [317]. - Accounts and notes receivable increased by $286 million (or 47%) to $896 million at June 30, 2024, driven by higher sales in Q2 2024 [318]. - Current liabilities decreased to $1.557 billion at June 30, 2024, from $2.486 billion at December 31, 2023, primarily due to a reduction in accounts payable [321]. - Long-term liabilities as of June 30, 2024, were $4,867 million, slightly down from $4,931 million as of December 31, 2023 [327]. - Total environmental remediation liabilities decreased from $590 million as of December 31, 2023, to $580 million as of June 30, 2024 [341]. - The five most significant environmental remediation sites account for 81% of total accrued liabilities, with expected spending of $171 million over the next three years [341]. Foreign Currency and Interest Rate Management - As of June 30, 2024, Chemours had 11 foreign currency forward contracts with a gross notional value of $208 million, resulting in net gains of $3 million for the quarter [374]. - The company entered into interest rate swaps with a notional value of $300 million to mitigate cash payment volatility, recognizing pre-tax gains of $1 million for the quarter ended June 30, 2024 [377]. - The company designated euro-denominated debt as a hedge of its net investment in international subsidiaries, recognizing pre-tax gains of $13 million and $27 million for the three and six months ended June 30, 2024, respectively [376].