Tronox (TROX) Misses Q4 EPS by 1c, Revenues Beat

Tronox (NYSE: TROX) reported Q4 EPS of $0.19, $0.01 worse than the analyst estimate of $0.20. Revenue for the quarter came in at $783 million versus the consensus estimate of $758.24 million.

Fourth Quarter 2020 Highlights:

• Revenue of $783 million
• Income from operations of $94 million; Net income from continuing operations of $57 million
• Adjusted EBITDA of $204 million; Adjusted EBITDA margin of 26 percent (Non-GAAP)
• GAAP diluted EPS of $0.31; Adjusted diluted EPS of $0.19 (Non-GAAP)
• TiO2 selling prices remained level, benefiting from margin stability initiatives, and sales volumes increased 8 percent versus fourth quarter 2019 driven by improved market demand globally
• Zircon volumes increased 48 percent versus fourth quarter 2019 driven primarily by strong demand in China

Jean-François Turgeon, co-chief executive officer on an interim basis, added, "Throughout the global pandemic, we have focused on three priorities: the safety, health and well-being of our employees and their families; operating safely in all respects while managing our ongoing operations; and protecting, preserving, and strengthening our business and laying the foundation for the future. I am proud to say that, despite the numerous challenges presented by COVID-19, we achieved a record-breaking year for safety in 2020, an incredible accomplishment attributable to the unrelenting focus by the Tronox team. John and I want to thank our employees for their continued commitment to safety during these challenging times. I am also extremely pleased with the accomplishments of the organization in once again over-delivering on our synergy targets. We delivered $243 million in total acquisition synergies in 2020, exceeding the $220 million run rate synergy target we set for 2022 at our Investor Day in 2019, and there are additional synergies that will be realized in 2021. Continued delivery of incremental synergies combined with the momentum on the commercial side of the business we anticipate will result in Q1 2021 Adjusted EBITDA of $200-$210 million."

Mr. Romano added, "We ended the year with $3.3 billion in debt. In addition to the $200 million discretionary debt repayment we made in December, we intend to repay an additional $300 million of debt by the end of the first quarter from cash on the balance sheet. We remain committed to deleveraging and reducing our gross debt to $2.5 billion and anticipate achieving this by 2023. Synergies from the Cristal transaction, prudent capital spending, and focused working capital management allowed us to generate $160 million in free cash flow during a very difficult year that brought many challenges due to the global pandemic. Our differentiated vertically integrated global manufacturing platform provided us with a number of levers to generate cash in 2020, including reducing planned capital expenditures by $80 million, and will enable us to optimize our financial performance during the market recovery."

Mr. Turgeon concluded, "We will remain focused on realizing the benefits from our vertically integrated business model. In 2021, this will also encompass two key capital projects: newTRON, our multi-year, global digital transformation project; and the Atlas Campaspe mine development project, which will strengthen our vertical integration by providing a future source of high-titanium content ilmenite, natural rutile, and zircon, while allowing us to further unlock the value of our enterprise and improve our return on capital to shareholders. We have emerged from 2020 a more resilient company and are confident our vertically integrated business model will continue to differentiate Tronox and enable continued outperformance of industry peers."

For earnings history and earnings-related data on Tronox (TROX) click here.

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