Titanium Technologies’ 3Q16 revenue
Chemours’ (CC) Titanium Technologies segment reported revenue of $625 million in 3Q16, as compared to $616 million in 3Q15, which implies a 1.5% rise in the segment’s revenue on a YoY (year-over-year) basis. The segment’s revenue represented 44.7% of Chemours’ total revenues in 3Q16.
In 3Q16, the Titanium Technologies segment reported adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $144 million, as compared to $80 million in 3Q15, which implies an 80% YoY rise in adjusted EBITDA.
The segment’s 3Q16 revenue rise stemmed primarily from the previously announced global price increase of all its Ti-Pure products. However, in regions like EMEA (Europe, the Middle East, and Africa) and Latin America, the price increase effect took place in August.
Chemours had previously announced another round of price increases in North America and Asia-Pacific, for which the benefits won’t be seen until 1Q17. The improved pricing in titanium dioxide had a 2% positive impact on segment’s revenue, while foreign currency translation had a marginal negative impact on segment’s revenue.
The segment’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) was primarily driven by cost control and improved operational efficiencies. This measure contributed to a ~67% rise in adjusted EBITDA, while the price increase contributed ~13%, making up for the 80% rise in adjusted EBITDA on a YoY basis.
According to Chemours’ management, for the rest of 2016, the process of implementing price increases of titanium dioxide will continue. The ramp-up of the Altamira plant in Mexico will also continue and provide cost benefits to the company along with increased capacity. At its full capacity, the plant could produce 200,000 metric tons of Tio2 pigment per year.
Investors can indirectly hold Chemours by investing in the Guggenheim S&P SmallCap 600 Pure Value ETF (RZV), which had 2.0% of its holdings in Chemours on November 7, 2016. The top holdings of this fund include Century Aluminum (CENX), Orion Group Holdings (ORN), and Ezcorp (EZPW), which had weights of 2.7%, 2%, and 2%, respectively, on November 7, 2016.
In the next part, we’ll analyze the performance of Chemours’ Fluoroproducts segment in 3Q16.