Company closing Taiwan titanium dioxide plant; CEO cites solid performance as company issues dividend
Wilminigton-based Chemours Company posted a second-quarter loss, due to a settlement over PFAs, sometimes known as forever chemicals.
The company also announced the closing of the Kuan Yin, Taiwan, titanium dioxide manufacturing site. Chemours made a similar decision eight years ago in closing the Edgemoor plant on the Delaware River. The State of Delaware razed and purchased the site as a future container port.
Since its spin-off from DuPont, Chemours has worked to reduce costs and wring efficiences out of a mature, cyclical business. Titanium oxide is used as a pigment in coatings.
Second quarter highlights
- Net sales of $1.6 billion
- Net loss of $376 million.
- Adjusted net income of $167 million
- Adjusted earnings before interest and other expenses (EBIDTA) of $324 million and free cash flow of $3 million.
- Reached a comprehensive settlement of PFAS-related drinking water claims of a defined class of U.S. public water systems with Chemours’ share totaling $592 million.
- Agreed to sell Chemours’ Glycolic Acid business to PureTech Scientific Inc. for $137 million.
- Launched operations at The Mobility F.C. Membranes Company as a part of Chemours’ joint venture in hydrogen.
- Issued Chemours’ sixth Sustainability Report highlighting progress towards 2030 environmental goals.
- On July 26, the company’s board approved a third-quarter dividend of $0.25 per share.
- Given weaker second-half demand visibility, Chemours anticipates full-year Adjusted EBITDA to be between $1.1 billion and $1.175 billion, with free cash flow guidance greater than $325 million.
The “destocking” of customer inventories has negatively affected the chemical industry. Reasons may center on supply chain issues being resolved and lower demand in a weaker economy.
“Our second quarter performance underscores the strength of our industry-leading businesses despite increasing economic uncertainty. In Thermal & Specialized Solutions, we delivered record net sales and adjusted EBITDA, and in Advanced Performance Materials demonstrated the strength of our Performance Solutions portfolio, achieving double-digit growth,” said Mark Newman, Chemours CEO. “As part of our plan to improve the earnings power of our Titanium Technologies segment, we have decided to close our Kuan Yin facility. This action will enable us to optimize our manufacturing circuit without compromising our ability to meet customer demand and deliver significant recurring cost savings starting in the second half of 2023.”
Second quarter 2023 Net Sales of $1.6 billion, were (14% lower than the prior-year quarter, driven by lower Net Sales in titanium and APM’s Advanced Materials portfolio. Price was a positive contributor, up 2%, offset by lower volumes of (16)%, while currency was relatively flat, on a year-over-year basis.
The second quarter net loss was $376 million, including $644 million of charges related to legal settlements for legacy PFAS environmental matters and associated fees.
Chemours has headquarters and research operations in northern Delaware.
