The Chemours Company Reports 3Q 2016 Results

The Chemours Company announced financial results for the third quarter 2016.
 
Third quarter net sales were $1.4 billion, a decrease of 6% from $1.5 billion in the prior-year quarter, primarily due to the impact of divestitures. Third quarter net income was $204 million, or $1.11 per diluted share, versus net loss of $29 million, or ($0.16) per diluted share in the prior-year quarter. Adjusted EBITDA for the third quarter was $268 million versus $169 million in the prior-year quarter.
 
“We continue to make excellent progress on all aspects of our transformation plan, realizing an incremental $60 million of cost savings during the quarter,” said Mark Vergnano, Chemours president and CEO. “We are benefiting from the Opteon refrigerant ramp up and the expansion of our low-cost TiO2 capacity at Altamira, while at the same time, delivering our planned cost reductions. And, in the quarter, our Titanium Technologies business benefited from more favorable market conditions, while the fluoropolymers market remained challenged.”
 
In the third quarter, Titanium Technologies segment sales were $625 million, a 1% increase versus the prior-year quarter. Improved year-over-year global average TiO2 pricing increased sales 2%, which was partially offset by minimal currency headwinds. Year-over-year, TiO2 volume was higher in all regions outside of China. Segment Adjusted EBITDA was $144 million, an 80% increase over the prior-year quarter. The increase in Adjusted EBITDA was primarily due to the benefits of price increases, transformation plan cost savings, and operational efficiencies.
 
Fluoroproducts segment sales in the third quarter were $591 million, an increase of 3% versus the prior-year quarter. A substantial increase in demand for Opteon refrigerants was mostly offset by government-imposed volume reductions of base refrigerants as well as competitive pricing pressure within fluoropolymers. Segment Adjusted EBITDA was $143 million, a 57% improvement versus the prior-year quarter.
 
In the third quarter, Chemical Solutions segment sales were $182 million, a 38% decline versus the prior-year quarter. Lower sales were driven by the divestitures of the Clean and Disinfect business, Sulfur Products and Beaumont Aniline facility, as well as reduced average prices based on contractual pass-through terms. Segment Adjusted EBITDA was $9 million, $1 million above the prior-year quarter.
 
As of Sept. 30, 2016, gross consolidated debt was $3.8 billion. Debt, net of cash, was $2.8 billion. In the quarter, the company retired approximately $115 million of its bonds.
 
“We remain disciplined and focused on executing our Five-Point Transformation Plan,” Vergnano concluded. “We expect the transformation plan improvements, along with a stronger price environment for TiO2 and increased Opteon refrigerants adoption to continue to enhance earnings, despite loss of earnings from divestitures, base refrigerant sales timing and unfavorable Fluoropolymers mix. We now expect full-year 2016 Adjusted EBITDA to be between $740 million and $775 million.”