Chemours to cut costs and review chemical business, against losses

Chemours, the performance chemicals company spun off from DuPont in July, is cutting US$350 million in costs by 2017 and reviewing options for its chemical solutions business. Chemours has three business units – Titanium Technologies, Fluoroproducts, and Chemical Solutions – which had more than US$6 billion in combined revenues in 2014. The company said second quarter net sales were US$1.5 billion, a decrease of 10% from US$1.7 billion in the prior-year quarter. Second quarter net loss was US$18 million.

The company has struggled lately with weak titanium dioxide prices and currency headwinds. Chemours said its previously announced restructuring moves will cut US$40 million in costs in the second half of the year.

It has also begun the evaluation of strategic alternatives for the Chemical Solutions segment, excluding the cyanide business, which it plans to grow by 50%. For the quarter ended June 30, chemical solutions sales were US$278 million, a 6% decline versus the prior-year quarter.

Titanium segment sales fell 18% to US$642 million due to lower prices and currency impacts. Fluoroproducts segment sales were US$588 million, a 2% decline versus the prior-year quarter.

All of the above brought about a second quarter net loss of US$18 million.

The company says it is is targeting US$140 million adjusted EBITDA improvement in the second half 2015 relative to the first half. It anticipates that additional reduction of structural costs, growth from Opteon refrigerants and normalised operations after extended maintenance shutdowns will contribute significant earnings improvement during the second half of the year.

The second-half performance assumes titanium dioxide pricing at or near cyclical lows. Capital expenditures, excluding separation-related spending, are projected to be US$400 to US$450 million as construction of its plant in Altamira nears completion at the end of 2015.