The Chemours Company this week took note of tougher market conditions during and after its spin-off from DuPont this month.
In this week’s earnings report, DuPont reported Performance Chemicals segment net sales in the second quarter of $1.5 billion and segment operating earnings of $113 million.
Chemours is based in Wilmington, after swapping headquarters sites with DuPont, which is now based at Chestnut Run. The company has about 1,000 employees in Delaware as it explores options for a permanent headquarters site.
Chemours stated that second quarter performance reflected an improvement in titanium dioxide shipments over the first quarter despite a slow start to the North American coatings season. Chemours operates a titanium dioxide plant in Edgemoor near Wilmington.
The volume improvement was offset by continued weakness in the pricing environment and currency headwinds across the businesses.
Chemours expects to report second quarter 2015 financial results on a stand-alone basis on August 6th.
Mark Vergnano, CEO of Chemours, said: “Our focus is to improve our earnings and cash flow by aggressively reducing our structural costs and optimizing our portfolio. We expect that our previously announced restructuring actions taken in the second quarter will reduce costs by $40 million in the second half of 2015 and $80 million annually thereafter. We are also targeting further cost reductions to deliver an additional $120 million in savings. Combined, we expect that these actions will reduce spending levels by approximately $200 million by year-end 2016.”
As previously disclosed, Chemours anticipates additional cash flow improvements from the management of its product lines.
The Altamira expansion, which is expected to be completed in mid-2016, is anticipated to aid the bottom line. Once Altamira is complete, capital expenditures will decline from the peak of capital spending in 2014. The Altamira site is in Mexico, a release stated.
The ramp up of the Opteon refrigerant product line will also aid results, the release stated. Chemours also continues to evaluate alternatives to improve the profitability of the Chemicals Solution segment.
There has been concerns about what some observers see as a weak financial picture for Chemours and its mature businesses that face tough global markets.
