VENATOR
Titanium dioxide sales slump 25% / Company cashes in iron oxide pigments and US plant
 In search of liquidity: CEO Simon Turner (Photo: Venator) |
In the third quarter of 2022, titanium dioxide manufacturer Venator (Stockton-on-Tees, UK; www.venatorcorp.com) suffered considerably from the slump in sales volumes of the white pigment. In the first nine months of the year, the company drew an adjusted EBITDA of USD 110 mn (same period last year: USD 140 mn) from a turnover of USD 1.8 bn (EUR 1.72 bn). The decline was mainly due to red figures in the third quarter. The net loss expanded slightly to USD 50 mn, compared to Q3 2021.
According to CEO Simon Turner, titanium dioxide sales fell by 25% in the third quarter. He cited the reluctance to buy in Europe and – because of China’s zero-Covid policy – also in Asia as the main reason. The slump was only partially offset by higher sales prices, which in turn were a reaction to the increased costs for energy and transport. The lower sales volumes also led to increased inventories, causing additional costs. So far, this development is continuing in the fourth quarter. The outlook is rather gloomy because of signs of a slowdown in the previously good North American business.
The opposite was true for the much smaller business unit, Performance Additives, where sales also declined (by 8%). However, the 31% higher sales prices easily compensated for this. Both turnover and adjusted EBITDA thus increased significantly.
Related: Venator wants to shut down production facilities in Germany / 280 jobs affected
In order to slow the cash outflow, which has led to the current debt level of USD 926 mn (previous year: USD 798 mn), Turner has been pursuing a rigid cost-cutting programme since the middle of the year. By the end of 2024, he expects annual savings of around USD 50 mn. In addition, Venator is divesting its iron oxide activities from the colour pigments business, which was sold to Cathay Industries (Ninove, Belgium; www.cathayindustries.eu) for USD 140 mn. The transaction is expected to be completed in the fourth quarter of 2023. Another short-term step towards more liquidity is the sale of the real estate of the US colour pigments plant in Los Angeles, California, which is to be leased back from buyer New Mountain Net Lease in the future.
According to CEO Simon Turner, titanium dioxide sales fell by 25% in the third quarter. He cited the reluctance to buy in Europe and – because of China’s zero-Covid policy – also in Asia as the main reason. The slump was only partially offset by higher sales prices, which in turn were a reaction to the increased costs for energy and transport. The lower sales volumes also led to increased inventories, causing additional costs. So far, this development is continuing in the fourth quarter. The outlook is rather gloomy because of signs of a slowdown in the previously good North American business.
The opposite was true for the much smaller business unit, Performance Additives, where sales also declined (by 8%). However, the 31% higher sales prices easily compensated for this. Both turnover and adjusted EBITDA thus increased significantly.
Related: Venator wants to shut down production facilities in Germany / 280 jobs affected
In order to slow the cash outflow, which has led to the current debt level of USD 926 mn (previous year: USD 798 mn), Turner has been pursuing a rigid cost-cutting programme since the middle of the year. By the end of 2024, he expects annual savings of around USD 50 mn. In addition, Venator is divesting its iron oxide activities from the colour pigments business, which was sold to Cathay Industries (Ninove, Belgium; www.cathayindustries.eu) for USD 140 mn. The transaction is expected to be completed in the fourth quarter of 2023. Another short-term step towards more liquidity is the sale of the real estate of the US colour pigments plant in Los Angeles, California, which is to be leased back from buyer New Mountain Net Lease in the future.
02.12.2022 Plasteurope.com [251655-0]
Published on 02.12.2022
German version of this article...