US Kronos Q4 profit down 62% on TiO2 prices, Canada labour deal

30 January 2014 14:29  [Source: ICIS news]

HOUSTON (ICIS)--Kronos expects to report a 62% year-over-year decline in fourth-quarter segment profit, mainly because of lower titanium dioxide (TiO2) prices and the cost of settling a labour dispute at its plant near Montreal, Canada, the US-based TiO2 producer said in a preliminary results release on Thursday.

Kronos' segment profit for the three months ended 31 December is expected at $1.8m, down from $4.7m in the 2012 fourth quarter, on sales of $368.6m, down from $396.8m.

Kronos said that TiO2 sales volumes for the fourth quarter were down 1% year over year to about 101,000 tonnes, with average prices down by about 10%.

Volumes were impacted by the lockout of unionised workers at the Canadian TiO2 facility. During the lockout, which began in June, Kronos’ non-unionised management staff ran the plant at about 15% of capacity.

Following a labour settlement costing Kronos $9m, full production at the plant is expected to resume within the current first quarter, the company said.

For the full year of 2013, Kronos expects to report a segment loss of $83.6m, compared with a profit of $373.8m in 2012.

The year-over-year decrease is primarily due to a 19% decline in average TiO2 selling prices, higher raw materials costs, a third-quarter 2013 litigation settlement charge of $35m, and the cost of settling the Canadian labour dispute, the company said.

TiO2 sales volumes are expected to be about 498,000 tonnes, up 6% from 2012.

Kronos added that it was currently "exploring the possibility" of accessing debt capital markets.

By: Stefan Baumgarten
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