Tronox, leading producers of high-quality titanium products, including titanium dioxide pigment, specialty-grade titanium dioxide products and high-purity titanium chemicals and zircon, reported revenue of $783 million for the fourth quarter 2020, an increase of 13 percent, compared to fourth quarter 2019 revenues of $693 million.  Income from operations was $94 million compared to $50 million in the year-ago quarter.  Net income attributable to Tronox was $45 million, or $0.31 per diluted share, compared to a net loss attributable to Tronox of $4 million, or $0.03 per diluted share, in the year-ago quarter. 

Revenue of $783 million increased 13 percent compared to $693 million.

TiO2 sales of $587 million increased 8 percent compared to $544 million; sales volumes increased 8 percent versus the year ago quarter driven by market recovery and a positive deviation from normal seasonal trends; selling prices remain unchanged on a U.S. dollar basis and declined 2 percent on a local currency basis year over year.

TiO2 volumes increased 8 percent, while pricing remained unchanged on a U.S. dollar basis, both versus the prior year and prior quarter. TiO2 sales volumes increased globally year over year led by South and Central America, followed by North America and Europe, Middle East, and Africa (EMEA).

Zircon sales of $94 million increased 32 percent from $71 million; sales volumes improved 48 percent primarily due to demand recovery in China while selling prices were 10 percent lower.

Feedstock and other products sales of $102 million increased 31 percent from $78 million due to improved pig iron demand.

Compared to the third quarter of 2020, sales volumes grew most significantly in Asia Pacific, followed by South and Central America, and EMEA.  Zircon revenue increased 32 percent versus the prior year and 68 percent sequentially, driven primarily by demand recovery in China and some benefit from shipment timing compared to the third quarter.  Fourth quarter zircon price was 10 percent lower versus the prior year, consistent with previous quarters in 2020 due to a pricing decrease in the first quarter of 2020, and 2 percent lower versus the third quarter.

Feedstock and other products revenues improved sequentially due to improved pig iron sales.  For the quarter, Tronox delivered Adjusted EBITDA of $204 million and an Adjusted EBITDA margin of 26 percent, driven by improved sales volumes, synergies, and favorable exchange rates, partially offset by increased production costs, when compared to Adjusted EBITDA in Q4 2019 of $156 million.  Acquisition synergies totaled $243 million in 2020, with $193 million reflected in full year Adjusted EBITDA.

Commenting on these results, John D. Romano, Co-Chief Executive Officer on an interim basis, stated, “As previewed in our earnings pre-release in January, Tronox delivered exceptional results in the fourth quarter, with the highest Adjusted EBITDA results since closing the Cristal acquisition.  Driving these results is a significant recovery across all products, end markets, and geographies across our portfolio.  As we have entered 2021, market demand for TiO2 and Zircon remains strong.  Due to the favorable market trajectory, we anticipate TiO2 sales volumes to increase 11-15 percent sequentially in Q1 2021.”

Jean-François Turgeon, Co-Chief Executive Officer on an interim basis, added, “Throughout the global pandemic, we have focused on three priorities: the safety, health and well-being of our employees and their families; operating safely in all respects while managing our ongoing operations; and protecting, preserving, and strengthening our business and laying the foundation for the future.

“I am proud to say that, despite the numerous challenges presented by COVID-19, we achieved a record-breaking year for safety in 2020, an incredible accomplishment attributable to the unrelenting focus by the Tronox team.  John and I want to thank our employees for their continued commitment to safety during these challenging times.  I am also extremely pleased with the accomplishments of the organization in once again over-delivering on our synergy targets. 

“We delivered $243 million in total acquisition synergies in 2020, exceeding the $220 million run rate synergy target we set for 2022 at our Investor Day in 2019, and there are additional synergies that will be realized in 2021.  Continued delivery of incremental synergies combined with the momentum on the commercial side of the business we anticipate will result in Q1 2021 Adjusted EBITDA of $200-$210 million.”

Romano added, “We ended the year with $3.3 billion in debt.  In addition to the $200 million discretionary debt repayment we made in December, we intend to repay an additional $300 million of debt by the end of the first quarter from cash on the balance sheet.  We remain committed to deleveraging and reducing our gross debt to $2.5 billion and anticipate achieving this by 2023.  Synergies from the Cristal transaction, prudent capital spending, and focused working capital management allowed us to generate $160 million in free cash flow during a very difficult year that brought many challenges due to the global pandemic.  Our differentiated vertically integrated global manufacturing platform provided us with a number of levers to generate cash in 2020, including reducing planned capital expenditures by $80 million, and will enable us to optimize our financial performance during the market recovery.”

Turgeon concluded, “We will remain focused on realizing the benefits from our vertically integrated business model.  In 2021, this will also encompass two key capital projects: newTRON, our multi-year, global digital transformation project; and the Atlas Campaspe mine development project, which will strengthen our vertical integration by providing a future source of high-titanium content ilmenite, natural rutile, and zircon, while allowing us to further unlock the value of our enterprise and improve our return on capital to shareholders.  We have emerged from 2020 a more resilient company and are confident our vertically integrated business model will continue to differentiate Tronox and enable continued outperformance of industry peers.”

Tronox reported revenue of $2,758 million for 2020, an increase of 4 percent from $2,642 million in 2019 on a reported basis.  Income from operations of $271 million compared to $95 million in the year-ago period on a reported basis.  Net income from continuing operations attributable to Tronox of $969 million, or $6.69 per diluted share, compared to a net loss from continuing operations attributable to Tronox of $114 million, or $0.81 per diluted share, in the year-ago period on a reported basis.