Advanced Chemicals Co. Posts 23% YOY Increase in Net Sales

Source: Streetwise Reports   05/03/2022

Shares of Chemours Co. traded 16% higher after the company reported Q1/22 financial results and raised its FY/22 adjusted EBITDA estimates by 12% over previous guidance.

After U.S. markets closed yesterday, global performance chemicals company The Chemours Company (CC:NYSE), which provides industrial and specialty chemicals products across four business segments including Advanced Performance Materials, Chemical Solutions, Thermal & Specialized Solutions, and Titanium Technologies, announced financial results for the first quarter of 2022 ended Mach 31, 2022.

Chemours stated that net sales in Q1/22 increased by 23% to $1.76 billion, compared to $1.44 billion in Q1/21. The company advised that in the latest quarter it enjoyed exceptional performance in its Thermal & Specialized Solutions (TSS) and Advanced Performance Materials (APM) business segments where it benefited from strong pricing and demand for its refrigerant and polymer products.

The company’s President and CEO Mark Newman commented, “Our outstanding first-quarter performance reflects the structural improvements we have made.

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The firm advised that for Q1/22 it posted a net income of $234 million, or $1.43 per diluted share, versus a net income of $96 million, or $0.57 per diluted share in Q1/21.

The company added that during the same corresponding period adjusted EBITDA increased by 50.4% year-over-year to $403 million.

Chemours stated that the improvements in profitability were the result of higher pricing and volumes that were partially offset by higher raw material costs and logistics challenges but noted that the overall price versus cost differential was mostly favorable.

The company’s President and CEO Mark Newman commented, “Our outstanding first-quarter performance reflects the structural improvements we have made in our three industry-leading businesses and the long-term secular growth trends underway in our TSS and APM segments…In our TT segment, we continue to manage through ore challenges, which we now believe will continue into the second half of 2022, while serving our TVS contracted customers and supporting their growth.”

“Our businesses continue to perform well against strong customer demand and are positioned to grow in 2022, despite the global economic uncertainties, exacerbated by the conflict in Ukraine and ongoing COVID-19 related lockdowns in China,” Newman added.

The company supplied a breakdown of performance in Q1/22 by business segment and reported that net sales in Titanium Technologies (TT) business, which is led by its Ti-Pure™ operations increased by 28% y-o-y to $928 million due to a 6% increase in volume and a 24% rise in prices.

The firm stated that net sales in its Thermal & Specialized Solutions (TSS) business rose by 40% y-o-y to $425 million. TSS volumes increased 1%, while prices were up about 40%.

Chemours noted that its Advanced Performance Materials (APM) division which is focused on clean energy and advanced electronics products achieved record net sales of $385 million, compared to $333 million in the prior-year quarter.

Chemours advised that its Board of Directors approved a second-quarter dividend of $0.25 per common share. The company added that during Q1/22, it repurchased $146 million of its own shares and that the Board granted authorization for additional repurchases of up to $750 million.

The company offered some forward guidance and advised that it raised its estimates for FY/22 and now expects adjusted EBITDA of between $1.475-1.575 billion and free cash of over $550 million. Chemours noted that the raised FY/22 adjusted EBITDA estimates are 12% higher at the midpoint versus its prior forecast.

CEO Newman stated, “Given the secular strength we see in TSS and APM, we are raising our full year adjusted EBITDA and free cash flow guidance while acknowledging that ore constraints in TT will continue in the second half of the year.”

Chemours is a global provider of advanced performance chemicals based in Wilmington, Del. The company’s TT, TSS and APM divisions provide a broad range of industrial and specialty chemicals products widely used in air conditioning and refrigeration, coatings, paints, plastics, electronics, and semiconductors, oil and gas and transportation. The firm stated that “its flagship products include prominent brands such as Ti-Pure™, Opteon™, Freon™, Teflon™, Viton™, Nafion™, and Krytox™.” The company operates 29 manufacturing sites and markets its products in 120 countries.

Chemours started the day with a market cap of around $5.3 billion with approximately 159.3 million shares outstanding and a short interest of about 4.8%. CC shares opened more than 8% higher today at $35.83 (+$2.73, +8.25%) over yesterday’s $33.10 closing price. The stock has traded today between $35.755 and $39.20 per share and is currently trading at $38.50 (+$5.40, +16.31%).

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