Q2 company results show further recovery for TiO2 buyers, sellers

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Published: Friday, 08 September 2017

AkzoNobel India’s revenues rise; TOR Minerals’ profit surge; Chemours: global demand outpacing economy

AkzoNobel’s India reported rising revenues thanks to increased coating sales, but profits fell in Q2, as input prices rose.

AkzoNobel India reported revenues up 1.6%, at Indian rupees (Inr) 7.91bn ($123.15m), thanks to a 2.5% boost in revenues from its coating segment.

But rising material costs hit profits, as EBITDA tumbled 32% to Inr 665.5m.
Jayakumar Krishnaswamy, managing director of AkzoNobel India, said "the quarter’s performance has been impacted due to slow sales growth and higher input prices".

Meanwhile, US speciality materials manufacturer TOR Minerals International Inc. saw profits triple in the second quarter of the year on the back of strong activity in its alumina division, while TiO2 pigment sales were flat.

The company reported a net profit of $352,000 in Q2 against $87,000 at this time last year – a growth of over 300%.

Revenues rose 9% in the period, mainly as speciality alumina demand increased in a number of markets, primarily Europe.

TiO2 pigment sales posted a mixed picture in the quarter, characterised by double-digit growth in Asia (+39%) and Europe (+22%) while the US saw a 19% decline.

The barium sulphate and other products division was also quite flat, with sales down 2%.

On the TiO2 business, Olaf Karasch, TOR Minerals’ CEO, said the company has worked towards reducing its cost profile, which means that now "TiO2 has also begun to contribute nicely to overall profitability".  

Elsewhere, Chemours reported global demand, as it sees sales outpace the rate of global growth.

"Demand for TiO2 tends to be in line with global GDP growth," Chemours CEO Mark Vergano told investors in August.

"However, this year our demand has trended above GDP in the high single digits, a result of market supply tightness and customer preference for our Ti-Pure products."

"If you go across the world, we’re seeing volume growth in all regions," he said.

Titanium prices have risen in the "high single digits" over the last quarter, Vergano said, helped by squeezed supply from Chinese competitors.

"There has been a bit of curtailment of supply out of China as a lot of the manufacturers are under scrutiny for environmental purpose," Vegano said.

Vergano also noted production stoppages in Europe: "I think you’re seeing that coupled with a little bit stronger demand (…) in the markets that we serve, and that’s putting a little bit of pressure on right now," he said. 

Chemours reported net sales up 15% year on year in the second quarter, at $1.6bn, realising a net profit of $161m, compared to a loss of $18m in the same quarter last year.