Chemours Co., Wilmington, announced a stock buyback and offered an upbeat 2018 outlook, according to a release and filing with the Securities and Exchange Commission.
Chemours President and CEO Mark Vergnano stated; “I am pleased to announce the completion of our five-point transformation plan and the beginning of a new chapter at Chemours. We successfully delivered on our plan, which is expected to result in improved Adjusted EBITDA of over $800 million over 2015 levels and reduced our net leverage down to approximately 2 times. Demand for Ti-Pure titanium dioxide, Opteon refrigerants, fluoropolymers and Chemical Solutions products continue to drive our results. The strength of our portfolio is now expected to deliver full-year 2017 Adjusted EBITDA of approximately $1.4 billion and more than $100 million in Free Cash Flow.”8K
Vergnano continued, “We believe that 2018 will be another great year for Chemours with Adjusted EBITDA expected to be between $1.7 and $1.85 billion. We see continued strength across our three segments, primarily driven by a preference for our high-quality Ti-Pure offerings and growth in Opteon refrigerants. We also expect to increase our Free Cash Flow to be within a range of $500 to $600 million, even after investing in our two new manufacturing facilities.”
EBITDA refers to earnings before interest, taxes and depreciation.
Vergnano stated that the company is implementing a strategy that aims to reduce the ups and downs in earnings in its key Titanium Technologies area.
Chemours CFO Mark Newman said, “I am excited to unveil our new capital allocation strategy, which is expected to return nearly $900 million to shareholders over the next three years. We have increased our dividend by over 5 times the previous amount, and now have the flexibility to simultaneously invest in our portfolio and buy back shares opportunistically. Our new financial strategy allows us to identify and fund growth opportunities, maintain our strong balance sheet, and return significantly higher levels of cash to shareholders.”
The company announced that the Chemours Board of Directors approved the first quarter of 2018 cash dividend on the shares of the company’s common stock in the amount of $0.17 per share, an increase of $0.14 per share from the previous level.
The company also announced that the Chemours Board of Directors authorized a $500 million share repurchase plan. The authorization extends through the end of 2020. Repurchases may be made at management’s discretion, subject to market conditions and other factors, and may be suspended or discontinued at any time.
Chemours shares are trading at around $50 a share after rising to a record $57 in late October. The company has been dealing with environmental issues in North Carolina over GenX chemical levels that have been detected around its plant.
Chemours’ stock price has soared since early 2016 when shares fell to the $3.50 range. An investor buying $10,000 in Chemours stock at that time could have seen the investment grow into the neighborhood of $150,000.