09 May 2013 15:00 [Source: ICIS news]
HOUSTON (ICIS)--US titanium dioxide (TiO2) firm Tronox reported a 2013 first-quarter net loss of $57m (€43m), compared with net income of $86m in the same quarter a year ago, according to a statement on Thursday.
Tronox’s sales for the three months ended 31 March rose 8.3% year on year to $470m.
However, cost of sales rose 58% year on year to $438m, resulting in a sharp decline in gross margin - to $32m, down from $157m in the 2012 first quarter.
CEO Tom Casey noted that Tronox's pigment volumes increased by 23% sequentially from the 2012 fourth quarter, reaching their highest level since the 2011 third quarter.
"We have now seen volume increases for two consecutive quarters and believe this may signal the end of artificially low demand levels caused primarily by customer destocking that occurred in 2012," Casey said.
"We continue to anticipate the global market for pigment to strengthen in the second half of this year," he added.
Hassan Ahmed, head of research at New York-based equities firm Alembic Global Advisors, said that even though Tronox’s first-quarter earnings were below analysts' estimates, the company had a "decent quarter" that indicated that the trough in the TiO2 cycle may be over.
"We believe the market will not be focused on [Tronox’s earnings] miss, relative to a thin consensus, but far more interested in sequential segment level performance which pointed to an across the board improvement signalling a recovery," Ahmed said.
($1 = €0.76)
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