Chemours(US:CC)2023-07-27 16:00Financial Performance - Net sales decreased by $500 million (or 14%) to $3.2 billion for the six months ended June 30, 2023, compared to $3.7 billion for the same period in 2022[285]. - For the three months ended June 30, 2023, net sales decreased by $272 million (or 14%) to $1.6 billion, down from $1.9 billion in the same period in 2022[290]. - The company reported a net loss of $230 million for the six months ended June 30, 2023, compared to a net income of $434 million for the same period in 2022[281]. - Basic loss per share for the six months ended June 30, 2023, was $(1.55), compared to earnings of $2.75 per share for the same period in 2022[281]. - For the three months ended June 30, 2023, Chemours reported a net loss of $376 million compared to a net income of $201 million for the same period in 2022[449]. - Adjusted Net Income for the first half of 2023 was $315 million, a decline of 41.7% from $540 million in the same period of 2022[449]. - Adjusted EBITDA for the six months ended June 30, 2023, was $628 million, down from $878 million in 2022, reflecting a decrease of approximately 28.5%[449]. - The company’s Adjusted EPS for the second quarter of 2023 was $1.10, down from $1.89 in the same quarter of 2022, representing a decline of approximately 41.5%[451]. Sales and Volume Changes - The decrease in net sales for the six months ended June 30, 2023, was primarily due to a 17% decrease in volume, partially offset by a 4% increase in price[285]. - The Titanium Technologies and Advanced Performance Materials segments experienced volume decreases, while the Thermal & Specialized Solutions segment saw higher volume[285]. - Titanium Technologies segment net sales decreased by $261 million (or 27%) to $707 million for the three months ended June 30, 2023, primarily due to a 27% decrease in volume[312]. - Advanced Performance Materials segment net sales decreased by $14 million (or 3%) to $387 million for the three months ended June 30, 2023, primarily due to a 9% decrease in volume[328]. - For the six months ended June 30, 2023, Advanced Performance Materials segment net sales decreased by $11 million (or 1%) to $775 million, with an 8% decrease in volume[328]. - Thermal & Specialized Solutions segment net sales increased by $5 million (or 1%) to $523 million for the three months ended June 30, 2023, primarily due to a 2% increase in price[320]. Expenses and Costs - Total other operating expenses for the six months ended June 30, 2023, were $972 million, compared to $462 million for the same period in 2022[280]. - Selling, general, and administrative (SG&A) expenses increased by $525 million (or over 100%) to $779 million for the three months ended June 30, 2023, primarily due to $644 million in legal charges[293]. - Research and development expenses for the six months ended June 30, 2023, were $54 million, compared to $55 million for the same period in 2022[288]. - Research and development (R&D) expenses increased by $3 million (or 12%) to $28 million for the three months ended June 30, 2023, attributed to spending on delayed projects[294]. - Interest expense, net increased by $8 million (or 20%) to $48 million for the three months ended June 30, 2023, primarily due to higher interest rates on variable rate debt[298]. Cash Flow and Liquidity - Operating cash flows decreased to a cash outflow of $58 million in the first half of 2023, compared to an inflow of $293 million in the same period of 2022, primarily due to lower earnings and increased costs[349]. - Investing activities resulted in cash outflows of $157 million in the first half of 2023, compared to $145 million in 2022, mainly for property, plant, and equipment purchases[350]. - Financing activities saw cash outflows of $146 million in the first half of 2023, down from $320 million in 2022, with $51 million used for stock repurchases and $75 million for dividends[351][352]. - As of June 30, 2023, the company had total cash and cash equivalents of $738 million, with $446 million held by foreign subsidiaries[344]. - The company maintained a restricted cash balance of $207 million as of June 30, 2023, related to an escrow account[356]. Environmental and Legal Matters - The company accrued $592 million for its share of a settlement related to PFAS claims for the quarter ended June 30, 2023[277]. - The company plans to contribute approximately $592 million to the Water District Settlement Fund as part of a settlement agreement, with funding expected from available cash and escrow accounts[342]. - Environmental remediation liabilities totaled $621 million as of June 30, 2023, down from $668 million at December 31, 2022[389]. - The five most significant remediation sites account for 85% of total accrued environmental remediation liabilities, with Fayetteville Works alone representing $418 million[396]. - The company expects to spend approximately $200 million on the five significant sites over the next three years, and $58 million on all other sites[396]. - The remediation process for sites can take about 15 to 20 years, followed by several years of operation, maintenance, and monitoring activities[390]. - Management does not anticipate any loss related to remediation activities at individual sites will materially impact the company's financial position or cash flows[392]. - The Chemours Company is subject to significant compliance costs related to environmental laws and regulations, which are expected to continue impacting operations[436]. Future Outlook and Strategic Initiatives - The company expects capital expenditures to be approximately $400 million, with $200 million allocated for growth and $200 million for maintenance and sustainability[332]. - The 2023 outlook anticipates a delayed recovery in Titanium Technologies, flat to slightly improved demand in Thermal & Specialized Solutions, and weaker demand in Advanced Performance Materials[337]. - The Chemours Company aims for a 60% reduction in Scope 1 and Scope 2 absolute GHG emissions by 2030, alongside a 99% reduction in air and water process emissions of fluorinated organic chemicals[429]. - The company has committed to achieving net zero greenhouse gas emissions from operations by 2050, aligning its climate goals with the Paris Accord[430]. - The Opteon™ product portfolio is expected to eliminate an estimated 325 million tons of carbon dioxide equivalents globally by 2025 due to its lower global warming potential[431]. - The new Ti-Pure™ Sustainability product series is designed to enhance sustainability goals through TiO2 innovation, with launches planned across market segments in 2023[435]. Debt and Financial Ratios - The Net Leverage Ratio as of June 30, 2023, was 2.6x, an increase from 1.6x in the previous year, indicating higher debt relative to EBITDA[458]. - Total debt principal as of June 30, 2023, was $3.653 billion, a slight decrease from $3.710 billion in 2022[458]. - The company recognized legal charges of $644 million in Q2 2023, significantly higher than $5 million in Q2 2022, primarily related to litigation settlements[449].