TiO2 production volumes up at Kronos in Q4 2010
Kronos Worldwide, Inc. reported net income for the fourth quarter
of 2010 of $36.4 million, or $.66 per diluted share compared with net income of $5.1 million, or $.11 per diluted share, in the fourth quarter of 2009.
For the full year of 2010, Kronos Worldwide reported net income of $130.6 million, or $2.59 per diluted share, compared with a net loss of $34.7 million, or $.71 per share for the full year 2009. Comparability of the Company's results was impacted by higher income from operations in 2010 periods principally due to higher sales volumes, higher TiO2 average selling prices and higher production volumes, as well as a $35.2 million non-cash deferred income tax benefit recognized in the first quarter of 2010, in each case as discussed further below.
Net sales of $373.3 million in the fourth quarter of 2010 were $71.4 million, or 24%, higher than the fourth quarter of 2009. Net sales of $1,449.7 million for the full year of 2010 were $307.7 million, or 27%, higher than the full year 2009. Net sales increased in the fourth quarter and the full year 2010 due primarily to higher sales volumes and higher TiO2 average selling prices. TiO2 sales volumes for the fourth quarter of 2010 increased 8% to 119,000 metric tons as compared to the fourth quarter of 2009, and increased 19% in the full year period to 528,000 metric tons.
The increase in sales volume for the full year period is a result of increased demand in all markets, and sales volumes for the full year in 2010 were a new record for Kronos. The Company's TiO2 average selling prices increased 22% in the fourth quarter of 2010 as compared to the fourth quarter of 2009, and increased 11% for the full year as compared to 2009, continuing the improvement in selling prices that began in the second half of 2009. The Company's TiO2 average selling prices at the end of 2010 were 5% higher as compared to the end of the third quarter of 2010 and such prices were 22% higher than at the end of 2009. Fluctuations in currency exchange rates also impacted net sales, decreasing net sales by approximately $17 million for the fourth quarter and approximately $36 million for the full year 2010. The table at the end of this press release shows how each of these items impacted net sales.
The Company's TiO2 segment profit for the fourth quarter of 2010 was $62.5 million compared with segment profit of $13.3 million in the fourth quarter of 2009. For the full year period the Company's segment profit was $185.8 million compared with a segment loss of $8.1 million for the full year 2009. Segment profit in both 2010 periods increased due to higher sales volumes, higher TiO2 selling prices and lower manufacturing costs per ton resulting from higher production volumes. These increases were partially offset by the unfavorable effects of fluctuations in currency exchange rates which decreased segment profit by approximately $3 million and $27 million in the fourth quarter and the full year period, respectively. The Company's TiO2 production volumes were 8% higher in the fourth quarter of 2010 as compared to the fourth quarter of 2009, and were 30% higher in the full year period.