The Chemours Company reports robust Q2, 2022 Results


The Chemours Company, a global chemistry company with leading market positions in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials, has announced its financial results for Q2, 2022.

Second Quarter 2022 Results & Highlights

  • Record Net Sales of US$1.9bn, up 16% yr-on-yr, including record Net Sales in all three segments
  • Net Income of US$201M with EPS of US$1.26, up US$0.87 yr-on-yr
  • Adjusted Net Income* of US$302M with Adjusted EPS* of US$1.89, up US$0.69 yr-on-yr
  • Adjusted EBITDA* of US$475M, up 30% yr-on-yr
  • Strong global demand for our refrigerants and higher value, differentiated polymer products led to record Adjusted EBITDA for both TSS and APM
  • Free Cash Flow of US$229M, up 21% yr-on-yr
  • Now targeting the high end of our full year Adjusted EBITDA guidance range of US$1.475bn to US$1.575bn and increasing our Free Cash Flow outlook to greater than US$600M
  • Announced Corpus Christi, Texas plant expansion to support strong demand for low GWP Opteon™ refrigerants
  • On July 27, 2022, the Company's Board of Directors approved a third quarter dividend of US$0.25 per share, consistent with the prior quarter

“The second quarter’s results demonstrate the strength of our highly focused portfolio,” said Mark Newman, Chemours President and CEO. “We achieved record-setting performances in TSS and APM, and our results in these two segments are a testament to their long-term secular growth potential. In TT, we continued to meet customer commitments despite challenging logistics conditions, and I am proud of the team’s efforts to serve our customers despite being ore constrained. The long-term growth prospects and earnings quality of the company remain strong in the face of challenging global macroeconomic conditions.”

Second quarter 2022 Net Sales were US$1.9bn, 16% higher than the prior-year quarter. Price was a positive contributor to the improved results, up 23%, partially offset by volume headwinds of (1)% and currency headwinds of (2)%, on a year-over-year basis. Portfolio change, driven by the sale of our Mining Solutions business in 2021, was a (4)% headwind on a yr-on-yr basis.

Second quarter Net Income was US$201M, resulting in EPS of US$1.26, inclusive of a US$165M charge associated with the legacy environmental remediation programs at our Fayetteville Works site. Adjusted Net Income was US$302M. Adjusted EPS was US$1.89, up US$0.69 vs. the prior-year quarter. Adjusted EBITDA for the second quarter of 2022 rose 30% to US$475M in comparison to US$366M in the prior-year second quarter, a result of higher pricing partially offset by raw material inflation and logistics challenges. Price vs. cost differential continued to be favourable in the second quarter. Currency was a (7)%, or US$(27)M headwind vs. the prior-year quarter due to a stronger USD.

Titanium Technologies (TT)
In the second quarter, Titanium Technologies segment Net Sales were a record US$968M, up US$109M, or 13%, from US$859M in the prior-year quarter. Compared with the prior-year quarter, price increased by 23%, volume declined by (8)%, and currency was a (2)% headwind. Lower volumes reflect the impact of ore constraints, which affected our ability to maximise production across our circuit. Price increased by 6% sequentially, driven by all customer channels as demand for our Ti-Pure™ pigment remained strong. Volume was flat on a sequential basis reflecting ongoing ore constraints despite steady demand for our products across all end-markets and regions. Segment Adjusted EBITDA was US$216M, flat to the prior-year quarter, resulting in a segment Adjusted EBITDA Margin of 22%. Adjusted EBITDA remained largely unchanged as the impact of the aforementioned increase in price was largely offset by lower volumes and higher raw material, energy, and logistics costs.

Outlook
Adjusted EBITDA for FY 2022 is now expected to be at the high end of the previously updated guidance range of US$1.475bn to US$1.575bn. We now expect Free Cash Flow to exceed USS$600M vs. our previous guidance of greater than US$550M.

Mr Newman concluded: “We now anticipate achieving the high end of our full year Adjusted EBITDA range and are raising our cash flow outlook to greater than US$600M as a result of our strong first half results. We are laser focused on delivering a strong 2022, while managing through increasingly uncertain macroeconomic conditions. As a management team, we are fully aligned on our four key strategic priorities – improving the earnings quality of TT, driving secular growth in TSS and APM, while managing and resolving legacy liabilities, and returning the majority of our Free Cash Flow to shareholders. We believe continuing to execute against these priorities is key to unlocking long term value for all our stakeholders.”


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