Chemours swings to Q2 net loss

Chemours swung to a second-quarter net loss of USD376m on the back of charges related to legal settlements and weaker results from its titanium technologies unit, the US-based pigment and fluoromaterials producer said.

Q2 net loss included the $644m of charges related to legal settlements for legacy PFAS environmental matters and associated fees, the company said in a statement.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 32% year on year to $324m in the second quarter, driven by poorer results in titanium technologies.

Titanium technologies sales fell by 27% year on year to $707m in the second quarter, while adjusted EBITDA was down by 60% at $87m.

The company also announced that it will be closing its titanium dioxide (TiO2) plant in Taiwan "as part of a comprehensive strategy to improve the earnings quality of its titanium technologies business".

The Kuan Yin site will stop producing dry titanium dioxide pigment on 1 August and decommissioning will begin immediately. "The company expects there will be no impact on product or service quality and no supply interruption during this transition," it said. The plant has 120,000 tonnes/year of TiO2 capacity.

We remind, Chemours Company has entered into a definitive agreement to sell its Glycolic Acid business for USD137 M in cash to PureTech Scientific, a company founded and backed by Iron Path Capital, a private equity firm focused on lower-middle market investments across the speciality industrial and healthcare sectors. The Chemours Company is a chemistry company with market positions in titanium technologies, thermal & specialized solutions, and advanced performance materials.

The Chemours Company is a global leader in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials providing its customers with solutions in a wide range of industries with market-defining products, application expertise and chemistry-based innovations.

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Brazilian petrochemical producer Braskem said its second-quarter resin sales volume in Brazil fell by 10% year-on-year, weighed down by lower demand, said Reuters.

The quarterly average utilization rate of Braskem's ethylene plants in Brazil was 72%, two percentage points lower than the previous year and five percentage points below the first quarter.

Polyethylene sales in Mexico jumped 13% from the previous year, with the utilization rate for polyethylene plants in the country increasing 19 percentage points to 86%.

The increase was explained by a larger supply of ethane by Mexican state oil company Pemex, "which provided an average of 36,000 barrels of ethane per day, above the contractual volume," said Braskem.

We remind, Braskem's Q1 main chemicals sales in Brazil fell 15%, year on year, while resin sales were stable, the Brazilian petrochemicals major said. Braskem puts under the main chemicals umbrella the following: ethylene, propylene, butadiene, cumene, gasoline, benzene, toluene and paraxylene. Main chemicals sales volume compared with 1Q 2022 decreased 15% due to lower demand in the period, which reflected in the utilisation rate of petrochemical crackers, the company said.

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Stepan’s Q2 polymers operating income decreased by USD17.6m from USD33.9m in the second quarter of 2022 to USD16.3m in the second quarter of 2023, the company said in its Q2 earnings call on Wednesday.

Stepan’s PA business accounted for a decrease of USD4.7m during the period. The decrease was attributed to reduced construction industry activity, as well as customer and channel inventory destocking.

The housing and construction sectors have experienced lower demand since 2022, hampered by elevated interest rates and shifting consumer spending habits, with the threat of a US recession looming. US housing starts fell by 8% in June, following a surge in May.

Demand for PA has suffered as a result of lower activity in the housing and construction industries, with PA being used in the production of various construction materials including piping, counter tops and insulation. According to market participants, demand is expected to be flat to lower for the remainder of 2023.

PA is used as a chemical intermediate in the production of phthalate plasticizers, as well as in unsaturated polyester resins (UPRs). Stepan and Koppers are the two US PA producers that sell to the market, while ExxonMobil produces PA for captive use.

We remind, Stepan’s Q1 operating income fell nearly 67% year on year to USD21m as sales volumes in the surfactants and polymers segments fell amid softening demand. Also hurting results were delays in the startup of new low 1,4 dioxane production assets and continued customer and channel destocking, the company said.

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The Chemours Company (Chemours), a global chemistry company with leading market positions in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials, announced the appointment of Joseph Martinko as President, Thermal & Specialized Solutions (TSS), effective immediately, said the company.

Martinko was appointed interim leader on June 1 and stood out as the top candidate following an internal and external search.

"Joe has been a principal architect of the entire Opteon™ solutions portfolio and brings unmatched knowledge of our thermal management products, market, and customers to this role. In addition, having led the commercialization and market transition to low-GWP Opteon™ products for the mobile and stationary refrigeration and foam expansion markets, he knows what it takes to innovate in the space as we look for more sustainable solutions," said Mark Newman, Chemours President and Chief Executive Officer. "With Joe's deep commercial and regulatory experience and his proven track record, I have no doubt that the TSS team will continue to deliver strong financial performance and business growth under his leadership."

Martinko brings to the role over 30 years of expertise in the chemical industry, with more than 20 years of experience across TSS and Chemours’ legacy fluoroproducts business in a range of global market, product, and regional leadership roles. Before he was appointed to lead TSS, he served as the Sr. Business Director, Americas, a role in which he drove business strategy, delivered record-breaking financial performance, and built a high-performing team. Prior to that, Martinko has held various roles in the fluoroproducts business with responsibility for regulatory and advocacy, customer service, marketing, sales, technical service, asset strategy and product management. Before Chemours, Martinko worked for over 20 years with DuPont in various business leadership and manufacturing roles.

"The TSS business has a solid foundation upon which we will continue to build," said Joseph Martinko, President of Chemours Thermal & Specialized Solutions. "We have an industry-leading product portfolio, an exciting innovation pipeline, and a highly capable and resolute team that knows how to win. All of this ensures that we are well positioned for continued growth. I have every confidence in our TSS team's ability to continue executing our strategy and delivering strong business results."

We remind, Chemours Company has entered into a definitive agreement to sell its Glycolic Acid business for USD137 M in cash to PureTech Scientific, a company founded and backed by Iron Path Capital, a private equity firm focused on lower-middle market investments across the speciality industrial and healthcare sectors. The Chemours Company is a chemistry company with market positions in titanium technologies, thermal & specialized solutions, and advanced performance materials.

The Chemours Company is a global leader in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials providing its customers with solutions in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. We deliver customized solutions with a wide range of industrial and specialty chemicals products for markets, including coatings, plastics, refrigeration and air conditioning, transportation, semiconductor, and consumer electronics, general industrial, and oil and gas. Our flagship products are sold under prominent brands such as Ti-Pure™, Opteon™, Freon™, Teflon™, Viton™, Nafion™, and Krytox™. The company has approximately 6,600 employees and 29 manufacturing sites serving approximately 2,900 customers in approximately 120 countries. Chemours is headquartered in Wilmington, Delaware and is listed on the NYSE under the symbol CC.

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Dutch paints and coatings maker Akzo Nobel raised its annual profit outlook, supported by declining raw material costs and resilient demand, said Reuters.

"We expect the second half of the year to be slightly better than the first one, but not significantly better," CEO Gregoire Poux-Guillaume told Reuters. Poux-Guillaume said volumes were rising in anything linked to automotive, marine and air space, while the building and construction sectors were suffering more.

The maker of Dulux and Flexa paints raised its 2023 outlook for adjusted core earnings (EBITDA) to 1.4-1.55 billion euros ($1.55-$1.72 billion, with a midpoint slightly above analysts' consensus forecast of 1.44 billion. The shares were up 2.4% at 76 euros as of 1110 GMT.

Akzo said it saw the first benefits of easing raw material costs in the second quarter. "We saw raw materials starting to turn especially in the Coatings business, while in Decorative Paints they were still up," Chief Financial Officer Maarten de Vries said on a media call.

Paint makers passed on steep raw material costs to customers last year through price increases. Akzo's prices in the second quarter were up 5% from a year earlier, to offset wage and energy cost inflation, it said. Its adjusted EBITDA rose 18% to 397 million euros in the quarter, slightly below the 403 million expected by analysts.

Akzo, which has warned of volume weakness due to the uncertain economic situation, said volumes were better than expected in the first half, declining by 2%.

We remind, AkzoNobel has received approval to supply its water-based refinish products to Porsche China – currently one of the premium automotive brand’s biggest markets.


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