Tronox Holdings plc — Second Quarter 2026 Earnings Summary

Financial Performance

• Revenue reached $868 million, a 19% year-over-year increase and a 14% sequential increase.
• TiO2 revenue was $700 million (19% YoY growth), driven by an 18% volume increase.
• Zircon revenue was $97 million (43% YoY growth), driven by a 61% volume increase, partially offset by an 18% decrease in average selling prices.
• Other products revenue was $71 million, a 7% decline year-over-year.
• Loss from operations was $21 million, compared to a $35 million loss in the prior year quarter.
• Net loss attributable to Tronox was $171 million ($1.07 per diluted share), compared to an $84 million loss ($0.53 per share) in the prior year.
• Adjusted net loss attributable to Tronox (non-GAAP) was $82 million ($0.51 per diluted share).
• Adjusted EBITDA was $73 million (8.4% margin), a 22% decrease year-over-year but an 18% increase sequentially.
• Free cash flow generated was $60 million, compared to a $55 million outflow in the prior year quarter.
• Capital expenditures were $45 million.
• Selling, general, and administrative expenses were $72 million; net interest expense was $56 million; depreciation, depletion, and amortization were $76 million.
• Total debt was $3.2 billion; net debt was $3.0 billion; net leverage ratio was 11.4x on a trailing twelve-month basis.
• Available liquidity totaled $527 million, including $194 million in cash and $333 million under revolving credit agreements.

Guidance and Future Outlook

• Full-year 2026 free cash flow is expected to be meaningfully positive.
• Q3 2026 adjusted EBITDA is guided to be between $95 million and $115 million.
• Q3 2026 TiO2 volumes are expected to moderate moderately in the mid-single-digit percentage range due to seasonal patterns.
• Q3 2026 zircon volumes are expected to moderate slightly compared to Q2 due to inventory availability following a strong first half.
• Q3 2026 TiO2 pricing is expected to improve sequentially in the mid-single-digit percentage range.
• Q3 2026 zircon pricing is expected to improve sequentially in the mid- to high single-digit percentage range.
• Q3 2026 free cash flow is expected to be relatively neutral.
• Outlook assumes continued realization of pricing actions and higher operating rates, partially offset by elevated input costs from Middle East volatility.

Business Segments and Product Lines

• TiO2 volumes reached the highest level since Q2 2022, supported by a global footprint and trade defense measures.
• Zircon volumes exceeded expectations and outperformed Q1 2025 levels due to constrained industry supply.
• Pricing for both TiO2 and zircon increased 5% sequentially in Q2, with additional pricing increases announced for Q3.
• Cost improvement program is on track to deliver savings at the higher end of the $125-$175 million annual run-rate target by end of 2026.
• Total inventory was reduced by approximately $120 million from Q1 levels to its lowest value since June 2024.
• Rare earths strategy continues with a focus on downstream movement; definitive feasibility study for cracking and leaching facility expected to conclude by Q3 2027.
• Plans include restarting a furnace and advancing production return at the West Mine in Namakwa to support inventory levels.

Market and Competitive Landscape

• Tronox benefits from structural shifts across the industry and trade defense measures.
• Industry-wide supply constraints contributed to strong zircon volume performance.
• Geopolitical developments in the Middle East create uncertainty and elevated input costs for the industry.
• The company maintains a preeminent position as the world's leading integrated TiO2 producer with unmatched vertical integration.

Risks and Challenges

• Macroeconomic conditions, inflation, and currency movements may impact results.
• Geopolitical instability, including conflicts in Eastern Europe and the Middle East, poses risks to supply chains and input costs.
• Volatility in TiO2, zircon, and feedstock prices affects margins.
• Potential disruptions in production at mining and manufacturing facilities.
• Forward-looking statements are subject to risks including policy changes, trade restrictions, and regulatory factors.

Management Commentary and Tone

• CEO John Romano highlighted strong commercial momentum continuing from Q1 into Q2.
• Management noted the ability to reliably serve customers supported volume performance.
• CFO/Management emphasized cash generation as a key priority, citing $60 million in positive free cash flow.
• Management expressed confidence in the cost improvement program and disciplined working capital management.
• Tone remains focused on strengthening the balance sheet and executing on operational decisions despite external uncertainties.

Other Key Points

• The Company replaced an expired short-term revolving credit facility with a new long-term financing arrangement to increase financial flexibility.
• The next significant debt maturity is not until 2029; there are no financial covenants on term loans or bonds.
• A gain on the sale of Fuzhou of $20 million was recognized in the quarter.
• A tax valuation allowance of $103 million was established against certain US state deferred tax assets.
• The Company has ample liquidity and does not expect to trigger the springing covenant on the US revolving credit facility.
• Tronox continues to evaluate opportunities to recover higher costs through pricing and commercial initiatives.