07 February 2013 16:29 [Source: ICIS news]
HOUSTON (ICIS)--Tronox has lowered its 2012 fourth-quarter guidance because of delayed or cancelled ore shipments, lower zircon prices, and an inventory write-down, the US-based titanium dioxide (TiO2) producer said on Thursday.
Tronox said that three scheduled ore shipments in the quarter were either delayed or cancelled by customers.
Meanwhile, zircon prices in the fourth quarter were roughly 12% below forecast. In addition, Tronox will take a $9.6m (€7.1m) inventory write-down, it said.
Tronox now expects to report fourth-quarter 2012 revenues of $482m and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of about $70m, “which is below previous guidance,” it said.
The company added that for the first time since 2005, fourth-quarter pigment sales volumes were higher than those of the preceding third quarter.
“The sequential difference was only 1,429 tonnes, but the company views this increase in what is normally a seasonally affected lower quarter as a positive sign,” it said.
Nevertheless, because prices declined 10.7% sequentially, which was more than the company had forecast, adjusted EBITDA from pigment sales was about $10m less than forecasted, Tronox said.
Hassan Ahmed, head of research at New York-based equities firm Alembic Global Advisors, said that de-stocking driven demand weakness in TiO2 may be coming to an end and that Tronox should see “earnings momentum accelerate in the back half of 2013.”
Tronox plans to release 2012 fourth-quarter and full-year results on 20 February. Until then, the company will be in a “quite period” and provide no further update, it said.
($1 = €0.74)
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