Tronox has flagged up a strong performance in the first results following the “game-changing” buy-out of titanium dioxide rival Cristal.
Second quarter analysis brought in revenues of $791 million (£651m) for the US giant, for which the sprawling site on the South Humber Bank is now its European focus.
Jeffry Quinn, chairman and chief executive, released the details having visited the Stallingbrough facility to talk up the investment and expansion opportunities late last month.
Of the period up to June 30, he said: “We delivered strong performance in our initial quarter following the closing of the game-changing Cristal TiO2 acquisition on April 10, 2019. On a pro forma basis, second quarter revenue of $827 million (£681m) increased 15 per cent from the first quarter 2019 on higher sales volumes for TiO2 and zircon, up 17 percent and 8 percent, respectively, while selling prices for TiO2 were level on a local currency basis and zircon selling prices were 1 percent lower due to customer and product mix.
“Adjusted EBITDA of $200 million (£164m) increased 42 per cent from the first quarter 2019 reflecting the sales volume growth, the early capture of synergies and the margin benefits from our shift to fully integrated operations. We are off to a good start to delivering our targeted synergies, with $12 million (£9.8m) realised in the second quarter.”
A net loss from continuing operations of $55 million (£45m) was recorded, including purchase accounting and transaction-related closing costs. It anticipates a shift to an income of £42 million (£34m) against the first quarter.
Mr Quinn and the senior management team were welcomed by new site director Andrew Ward to the plant, which has been producing the whitening agent used across manufacturing sectors since 1953. It employs 400 people, with an annual production capacity of 165,000 tonnes, making it the third largest in the world-leading portfolio.
In an exclusive interview with Business Live he brushed off Brexit concerns, with the plant by far the biggest producer in Europe, flagging up the uncertainty around it as the biggest issue.
Looking ahead to the second half of the financial year, Mr Quinn said: “As we anticipated, TiO2 pigment markets in Europe and Asia have stabilised as inventory destocking has run its course and North American market conditions remain resilient.
"We continue to successfully work with our pigment customers on our bespoke win-win margin stability initiative and now serve a customer base that has more than doubled in size with the ability to offer the broadest, category leading product portfolio in the industry.
"Though global macro-economic conditions remain uncertain and we have recently seen some softness in the zircon market, we are maintaining our outlook for the full year 2019, within the previously provided ranges and narrowing our guidance on a reported basis.”
That is to the lower half of the previously provided range for revenue of $2,830 million (£2,331m) to 2,980 million (£2,455m) and the lower half of the previously provided range for adjusted EBITDA of $635 million (£523m) to $740 million (£609m).
