Tronox(TROX) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights Tronox reported Q1 2025 revenue of $738 million, a significant net loss, and maintained full-year guidance with new cost savings Q1 2025 Financial Performance Summary | Financial Metric | Q1 2025 (Millions USD) | Change vs Q4 2024 | Change vs Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $738 | +9% | -5% | | Net Loss | ($111) | n/m | n/m | | GAAP Diluted EPS | ($0.70) | n/m | n/m | | Adjusted Net Loss | ($24) | n/m | n/m | | Adjusted Diluted EPS | ($0.15) | n/m | n/m | | Adjusted EBITDA | $112 | -13% | -15% | | Adjusted EBITDA Margin | 15.2% | -390 basis points | -170 basis points | - The net loss includes $87 million in restructuring and other charges, primarily non-cash costs associated with the idling of the Company's Botlek pigment plant[3] - The company has initiated actions expected to deliver $125-$175 million in sustainable, run-rate cost improvements by the end of 2026[3][6] - Full-year 2025 guidance is maintained for Revenue ($3.0-3.4 billion), Adjusted EBITDA ($525-625 million), and free cash flow (>$50 million), while capital expenditures are reduced to less than $365 million[3][16] CEO's Remarks The CEO noted stronger TiO2 demand, weaker Zircon sales, and strategic actions to enhance cost position and cash flow - TiO2 demand saw a stronger than normal seasonal uplift, led by Europe where sales volumes recovered to levels not seen since Q2 2021 following the finalization of anti-dumping duties[5] - Zircon sales were lower as anticipated due to weaker overall demand, primarily in China[5] - Strategic actions to improve performance include idling the Botlek pigment plant, which is expected to improve 2025 free cash flow and deliver over $30 million in cost improvements from 2026 onwards[6] - Capital expenditures are focused on completing South Africa mining projects, which are expected to improve the mining cost profile by $50-60 million from 2025 to 2026[6] - The company continues to advocate for anti-dumping tariffs in Brazil, India, and Saudi Arabia to combat competitive pressures[7] Detailed Financial Performance Q1 2025 revenue decreased 5% to $738 million, resulting in a $111 million net loss and a 15% decline in Adjusted EBITDA Revenue Analysis TiO2 revenue was $584 million, down 3% YoY but up 10% QoQ, while Zircon revenue dropped 22% to $69 million Q1 2025 Revenue by Product | Product | Q1 2025 Revenue (Millions USD) | YoY Change | QoQ Change | Key Drivers (YoY) | | :--- | :--- | :--- | :--- | :--- | | TiO2 | $584 | -3% | +10% | -1% volume, -1% price/mix, -1% FX | | Zircon | $69 | -22% | -8% | -15% volume, -7% price/mix | | Other Products | $85 | +5% | +25% | Higher sales volumes of pig iron and ilmenite | Profitability Analysis Profitability declined with a GAAP net loss of $111 million due to restructuring, and Adjusted EBITDA fell 15% to $112 million Q1 Profitability Metrics | Profitability Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | | :--- | :--- | :--- | | Net Loss Attributable to Tronox | ($111) | ($9) | | GAAP Diluted Loss Per Share | ($0.70) | ($0.06) | | Adjusted Net Loss (Non-GAAP) | ($24) | ($7) | | Adjusted Diluted Loss Per Share (Non-GAAP) | ($0.15) | ($0.05) | - Adjusted EBITDA decreased 15% YoY to $112 million, driven by lower sales volumes, lower average selling prices, higher freight costs, and FX headwinds, partially offset by lower production and corporate costs[12] - Sequentially, Adjusted EBITDA decreased 13% due to higher production costs, lower prices, and higher corporate costs, partially offset by higher sales volumes[13] Financial Position and Cash Flow Tronox ended Q1 with $3.0 billion total debt and 5.2x net leverage, maintaining solid liquidity, with free cash flow as a $142 million use Financial Position Summary | Metric | As of March 31, 2025 (Millions USD) | | :--- | :--- | | Total Debt | $3,000 | | Net Debt | $2,800 | | Available Liquidity | $443 | | Net Leverage Ratio (TTM) | 5.2x | - The next significant debt maturity for the Company is not until 2029[14] - Free cash flow for the quarter was a use of $142 million, driven by capital expenditures of $110 million[15][37] Full-Year 2025 Outlook Tronox reaffirmed full-year 2025 guidance for revenue, Adjusted EBITDA, and free cash flow, expecting stronger second-half performance 2025 Full-Year Guidance Summary | 2025 Full-Year Guidance | Value (Millions USD) | | :--- | :--- | | Revenue | $3,000 - $3,400 | | Adjusted EBITDA | $525 - $625 | | Capital Expenditures | < $365 (Reduced) | | Free Cash Flow | > $50 | - The company expects the second half of 2025 to be stronger than the first, building on momentum from anti-dumping measures in Europe and potential benefits in India and Brazil[16] - A sustainable, run-rate cost improvement program is expected to deliver $125-$175 million in savings by the end of 2026, with the majority of savings realized in 2026[16] Appendix: Financial Statements & Reconciliations This appendix provides detailed unaudited Q1 2025 financial statements and reconciliations of non-GAAP measures to U.S. GAAP Condensed Consolidated Statements of Operations (U.S. GAAP) For Q1 2025, Tronox reported net sales of $738 million, a $61 million operating loss, and a $111 million net loss ($0.70 per share) Condensed Consolidated Statements of Operations | (In Millions USD) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $738 | $774 | | Gross profit | $99 | $120 | | (Loss) Income from operations | $(61) | $41 | | Net loss attributable to Tronox | $(111) | $(9) | | Diluted loss per share | $(0.70) | $(0.06) | Condensed Consolidated Balance Sheets (U.S. GAAP) Tronox reported total assets of $6.07 billion, liabilities of $4.36 billion, and equity of $1.71 billion Condensed Consolidated Balance Sheets | (In Millions USD) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $2,193 | $2,155 | | Total assets | $6,069 | $6,038 | | Total current liabilities | $961 | $874 | | Total liabilities | $4,363 | $4,247 | | Total equity | $1,706 | $1,791 | Consolidated Statements of Cash Flows (U.S. GAAP) Q1 2025 cash flows show $32 million used in operations, $95 million in investing, and a $14 million net decrease in cash Consolidated Statements of Cash Flows | (In Millions USD) | Three Months Ended March 31, 2025 | | :--- | :--- | | Cash used in operating activities | $(32) | | Cash used in investing activities | $(95) | | Cash provided by financing activities | $108 | | Net decrease in cash | $(14) | | Cash at end of period | $138 | Reconciliation of Non-U.S. GAAP Financial Measures This section details adjustments to reconcile U.S. GAAP to non-GAAP measures, including Adjusted Net Loss, Adjusted EBITDA, and Free Cash Flow - Reconciliation from GAAP Net Loss to Adjusted Net Loss for Q1 2025 shows a primary adjustment of +$86 million for restructuring charges, leading to an Adjusted Net Loss of $(24) million[24][25] - Reconciliation from GAAP Net Loss to Adjusted EBITDA for Q1 2025 includes adding back interest, taxes, D&A, and an $86 million restructuring charge, resulting in an Adjusted EBITDA of $112 million[30][34] - Free Cash Flow for Q1 2025 is calculated by taking cash used in operating activities ($(32) million) and subtracting capital expenditures ($(110) million), resulting in a free cash flow of $(142) million[37]