Tronox sees Q4 revenue and adjusted EBITDA ‘relatively flat’ to Q3

In its updated outlook, Tronox (TROX) expects Q4 revenue and adjusted EBITDA to be relatively flat to Q3 and free cash flow to be a source in the quarter. Assumes TiO2 volume growth of 3-5% and zircon volume growth of 15-20% compared to Q3, offset by unanticipated headwinds on TiO2 and zircon pricing of ~2% and ~6%, respectively. “This outlook is based on Tronox’s views on current global economic activity and is subject to changes and impacts associated with the macroeconomic conditions, global supply chain, and inflation-related challenges, among others,” the company stated. Chief Executive Officer John Romano added: “Although our outlook has been revised lower from our previous guidance, we expect fourth quarter TiO2 volumes to increase 3-5%, net of a ~2% volume headwind from idling our Fuzhou facility, and zircon volumes to increase 15-20%, sequentially. These are strong leading indicators for the fourth quarter, which is normally lower due to seasonality, and directionally in-line with what we would historically see on the front end of a recovery. With final duties implemented in the European Union, India, Brazil and Saudi Arabia this year, we have unlocked the opportunity for improved share in regions that previously imported approximately 800,000 tons of TiO2 from China at the peak. Combining this with the industry’s idled mining capacity and over 1.1 million tons of global TiO2 supply that has been taken offline since 2023, the majority of which is permanent, the industry is undergoing a structural shift that supports a supply / demand rebalance. These developments are very positive for Tronox, especially as the sole domestic producer in Brazil and Saudi Arabia and a significant participant in the European Union and Indian markets. As the most vertically integrated TiO2 producer, Tronox is well positioned to capitalize on the opportunity created by the rebalancing of the market. I remain confident in our ability to navigate this environment and deliver meaningful value for our shareholders.”