Tronox’s Q2 net loss widens to $34.4m

30 July 2008 13:49  [Source: ICIS news]

TORONTO (ICIS news)--Tronox posted a second-quarter net loss of $34.4m, compared with a loss of $21.2m in the year-earlier period, due to higher costs, problems at production plants and one-off charges, the US pigment producer said on Wednesday.

 

Sales for the three months ended 30 June were $403.8m, up 10%, it said, while its gross margin fell to $200,000, from $30m in the second quarter of 2007.

 

Tronox said the decline in second-quarter profit was primarily due to significant increases in process chemical, energy and transportation costs and unplanned production difficulties at plants in Germany and Australia.

 

In addition, the company recorded $17.7m in charges related to goodwill and restructuring in the second quarter, it said.

 

These negatives were only partially offset by increased sales, lower general and administration expenses, and a $12.4m gain on land sales, Tronox said.

 

Going forward, Tronox would focus on achieving price increases and reducing costs, it said.

 

“In the third quarter, the company is continuing to see further price increases being implemented in all three regions of the world,” it said.

 

“However, we are also continuing to see cost increases in process chemicals, energy and transportation,” it added.

 

Tronox would also continue to evaluate strategic alternatives to improve the business and address ongoing challenges, including development opportunities, capital restructuring, land sales and all other options, it said.

 

Tronox had hired financial advisor Rothschild Inc to assist in this, it added.

 

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By: Stefan Baumgarten
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