Chemours earnings decline as titanium market softens & start-up costs put dent in results

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The Chemours Company, Wilmington, reported lower earnings and revenues in the first quarter.

“Our results in Q1 were consistent with our expectations for a slower start to 2019,” said Chemours CEO Mark Vergnano. “Our performance reflects the combination of lower volumes in our Titanium Technologies segment, the impact of illegal imports on our refrigerants business in Europe, and increased costs related to operating issues, including the startup of our Corpus Christi Opteonfacility. These headwinds haveoffset the continued adoption of Opteon refrigerants globally, as well as application development wins in Fluoropolymers. Our teams are working hard to improve performance and we remain focused on maximizing the value of our three best-in-class chemicals platforms. We remain firm in our commitment to return the majority of our free cash flow to shareholders, as evidenced by the $261 million of share repurchases in the first quarter.”

First quarter 2019 net sales were $1.4 billion in comparison to $1.7 billion in the record, prior-year quarter. Results were driven primarily by lower volume in Titanium Technologies, resulting in a 20 percent decrease in net sales, partially offset by a 1 percent increase in global average prices across all segments.

Firstquarter net income was $94 million, a figure that included $27 million charge related to the Fayetteville facility. Work is underway in reducing discharges of chemicals into nearby waterways.

Adjusted earnings before interest, taxes, depreciation and amortization in the first quarter 2019 was $262 million, compared to $468 million in the previous year’s record first quarter, a result of lower volumes and increased costs year-over-year.

Vergnano said: “Despite a soft first quarter, the underlying fundamentals across our business remain solid. We anticipate titanium dioxide markets will stabilize as we move into the second half of 2019, and believe that we are well positioned in all our markets headed into the spring. The management team at Chemours is fully committed to executing our strategies, including Ti-Pure Value Stabilization, accelerated adoption of Opteon refrigerants, and application development in Fluoropolymers. We believe that consistent execution, together with prudent capital allocation, is the key to unlocking shareholder value over time.”

The titanium dioxide market remains subject to ups and downs on pricing and demand. Chemours is working to build long-term relationships and contract with customers as a way to provide more stability for all concerned.

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