TiO2 manufacturer Kronos Q1 net sales slip 9% to $420.1mn

Kronos Worldwide, Inc. reported net income for the first quarter of 2014 of $14.3 million, or $.12 per share, compared to a net loss of $41.1 million, or $.35 per share, in the first quarter of 2013. Comparability of the Company's results was impacted by improved results from operations in the first quarter of 2014 principally due to lower raw materials costs, partially offset by lower average TiO2 selling prices and sales volumes in 2014, as discussed further below.   

  

Kronos Worldwide, Inc. reported net income for the first quarter of 2014 of $14.3 million, or $.12 per share, compared to a net loss of $41.1 million,#

Net sales of $420.1 million in the first quarter of 2014 were $43.5 million, or 9% lower than in the first quarter of 2013 primarily due to lower average TiO2 selling prices and lower sales volumes. The Company's average TiO2 selling prices were 5% lower in the first quarter of 2014 as compared to the first quarter of 2013, and average selling prices at the end of the first quarter of 2014 were 4% lower than at the end of 2013, with lower prices primarily in export markets that resulted from competitive pressures.  

 

As a result, we experienced significantly lower sales to our generally lower-margin export markets in the first quarter of 2014 as compared to the same period in 2013.  TiO2 sales volumes for the first quarter of 2014 decreased 7% as compared to the first quarter of 2013, with the lower volumes in export markets offset in part by increased demand in certain European markets.  

 

Fluctuations in currency exchange rates also affected net sales comparisons, increasing net sales by approximately $7 million as compared to the first quarter of 2013.  The table at the end of this press release summarizes how each of these items impacted the overall decrease in sales.

 

The Company's TiO2 segment profit (see description of non-GAAP information below) for the first quarter of 2014 was $28.6 million as compared to a segment loss of $43.6 million in the first quarter of 2013.  

 

Segment profit in the first quarter of 2014 increased primarily due to the net effects of lower raw materials and other production costs (primarily caused by lower third-party feedstock ore costs), lower average TiO2 selling prices and lower sales volumes.  As expected, cost of sales per metric ton of TiO2 sold in the first quarter of 2014 was significantly lower than TiO2 sold in the first quarter of 2013, primarily due to lower raw material costs.  

 

Click here to view full results.