Q4 2023 Tronox Holdings PLC Earnings Call

Operator: Good morning, ladies and gentlemen, and welcome to the Tronox Holdings Q4 2023 earnings call. At this time, all lines are in listen-only mode.

Good morning, ladies and gentlemen, and welcome to the Tronox Holdings Q4, 2023 earnings call.

At this time all lines are in listen only mode.

Operator: Following the presentation, we will conduct the question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. I will now turn the call over to Jennifer Gunther, Chief Sustainability Officer and Head of Investor Relations. Please go ahead.

Following the presentation, we will conduct a question and answer session.

If at any time during this call you required immediate assistance. Please press star zero for the operator.

I will now turn the call over to Jennifer Gunther Chief Sustainability Officer, and head of Investor Relations. Please go ahead.

Jennifer Gunther: Thank you and welcome to our fourth quarter and full year 2023 conference call and webcast. Turning to slide two, on our call today are John Romano and Jean-Francois Tourgeon, Co-Chief Executive Officers, and John Srivastava, Senior Vice President, Chief Financial Officer. We will be using slides as we move through today's call. You can access the presentation on our website at Investor. Tronox.com.

Jennifer Gunther: Thank you and welcome to our fourth quarter and full year 2023 conference call and webcast turning to slide two on our call today are John Romano and John Prince Water Zone Co Chief Executive Officer, and John <unk>, Senior Vice President Chief Financial Officer.

Jennifer Gunther: We will be using slides as we move through today's call you can access the presentation on our website at Investor Dot Tronox Dotcom moving.

Jennifer Gunther: Moving to slide three. A friendly reminder that comments made on this call and the information provided in our presentation and on our website include certain statements that are forward-looking and subject to various risks and uncertainties, including but not limited to the specific factors summarized in our SEC filings. This information represents our best judgment based on what we know today. However, actual results may vary based on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements.

Jennifer Gunther: Moving to slide three.

Jennifer Gunther: Friendly reminder, that comments made on this call and the information provided in our presentation and on our website include certain statements that are forward looking and subject to various risks and uncertainties, including but not limited to the specific factors summarized in our SEC filings. This information represents our best judgment based on what we know today. However, actual results may vary based.

Jennifer Gunther: These risks and uncertainties the company undertakes no obligation to update or revise any forward looking statements.

Jennifer Gunther: During the conference call, we will refer to certain non-US GAAP financial terms that we use in the management of our business and believe are useful to investors in evaluating the company's performance. Reconciliations to their nearest U.S. GAAP terms are provided in our earnings release and in the appendix of the accompanying presentation. Additionally, please note that all financial comparisons made during the call are on a year-over-year basis unless otherwise noted. It is now my pleasure to turn the call over to John Romano. John?

Jennifer Gunther: During the conference call, we will refer to certain non U S. GAAP financial terms that we use in the management of our business and believe are useful to investors in evaluating the company's performance reconciliations.

Jennifer Gunther: Reconciliations to their nearest U S. GAAP terms are provided in our earnings release and in the appendix of the accompanying presentation. Additionally, please note that all financial comparisons made during the call are on a year over year basis, unless otherwise noted. It is now my pleasure to turn the call over to John Romano John.

John D. Romano: Thanks, Jennifer, and good morning, everyone. We'll begin this morning on slide 5 with some key messages from the quarter. We delivered fourth quarter top line performance in line with expectations. TIO2 sales volumes declined approximately 4% in the quarter compared to the third quarter.

John D. Romano: Thanks, Jennifer and good morning, everyone. We'll begin this morning on slide five with some key messages for the quarter.

John D. Romano: We delivered fourth quarter topline performance in line with expectations <unk> sales.

Sales volumes declined approximately 4% in the quarter compared to the third quarter volumes.

John D. Romano: Volumes were slightly lower than expected due to more seasonality in North America than anticipated, and we also experienced some shipment delays as a result of congestion in the Red Sea that delayed some stock transfers to cover our botanic outage in Europe. However, our TO2 pricing was only down 1% compared to the third quarter, which was better than our previous guidance. Our Zircon volumes increased 82% versus the third quarter, higher than expected and communicated on our last earnings call. However, we did experience some unfavorable product and regional mix which negatively impacted our marginal core. Zircon pricing was down 9% compared to the 3rd quarter due to product mix and some regional pricing adjustments, primarily in Asia Pacific.

John D. Romano: Volumes were slightly lower than expected due to more seasonality in north America than anticipated and we also experienced some shipment delays as a result of congestion in the Red sea that delayed some stock transfers to cover our bottleneck outage in Europe.

Our T O two pricing was only down 1% compared to the third quarter, which was better than our previous guide.

John D. Romano: Our zircon volumes increased 82% versus the third quarter.

John D. Romano: Than expected and communicated on our last earnings call. However, we did experience some unfavorable product and regional mix, which negatively impacted our margin quarter.

John D. Romano: Zircon pricing was down 9% compared to the third quarter due to product mix and some regional pricing adjustments primarily in Asia Pacific.

John D. Romano: Revenue was also higher from other products due to additional sales of pig iron, as well as opportunistic sales of ilmenite and a portion of our rare earths tailing deposit in South Africa, which is a key part of our funding strategy for our rare earths business. However, our adjusted EBIT for the fourth quarter came in $11 million below our guided range. This was primarily driven by a delayed restart of our steam supplier at Botlic and higher costs from unanticipated downtime stemming from running at lower rates. While the bottling situation is now under control, and our supplier is back up and running, we saw approximately 10 million more in costs than forecasted due to the longer downtime. Importantly, our supplier outage did not disrupt our ability to fulfill customer demand, as we were able to reposition inventory from our other global assets to meet customer demand in Europe.

John D. Romano: Revenue was also higher from other products due to additional sales of pig iron as well as opportunistic sales of ilmenite and a portion of our rare Earths tailing deposit in South Africa, which is a key part of our funding strategy for our railroad business.

John D. Romano: Our adjusted EBITDA for the fourth quarter came in at $11 million below our guided range. This was primarily driven by a delayed restart of our steam supplier at bottleneck and higher costs from unanticipated downtime stemming from running at lower rates.

John D. Romano: While the Baltic situation is now under control and our suppliers back up and running we saw approximately $10 million more in cost than forecasted due to the longer downtime importantly, our supplier outage did not disrupt our ability to fulfill customer demand as we were able to reposition inventory from our other global assets to meet customer demand in Europe.

John D. Romano: We expect to recover at least $15 million in insurance proceeds in 2024 as a result of the downtime at Publick in the second half of 2023. This amount represents the cost incurred to continue to provide uninterrupted service to our customers while working around the supplier outage. The operating challenges we experienced in the last six months are not indicative of the standard we hold ourselves to at Tronox, and we're addressing these challenges head-on in 2024. In 2023, we ran at the lowest utilization rates on record in order to manage inventories and free cash flow in light of lower market demand.

John D. Romano: We expect to recover at least $15 million of insurance proceeds in 2024 as a result of the downtime at public in the second half of 2023.

This amount represents the costs incurred to continue to provide uninterrupted service to our customers while working around supplier outage.

John D. Romano: The operating challenges we experienced in the last six months are not indicative of the standard we hold ourselves to a tronox and we're addressing these challenges head on in 2024.

John D. Romano: In 2023, we ran at the lowest utilization rates on record in order to manage inventories and free cash flow in light of the lower market demand.

John D. Romano: As we look into 2024, we're adjusting our operating rights to support the market recovery currently underway. This will set Tronox up to realize a step change in earnings power after we work through the remaining high-cost inventory on the balance sheet. Our free cash flow for the quarter came in higher than expected at $51 million despite the lower than forecasted earnings owing to our Cash Management Initiatives. Additionally, we saw a positive inflow of nearly $60 million from working capital.

John D. Romano: As we look into 2024, we're adjusting our operating rates to support the market recovery. Currently underway. This will set tronox up to realize a step change in our earnings power. After we work through the remaining high cost inventory on the balance sheet.

John D. Romano: Our free cash flow for the quarter came in higher than expected a $51 million, despite the lower than forecasted earnings owing to arc.

John D. Romano: Cash management initiatives, we saw a positive inflow of nearly $60 million from working capital quarter.

John D. Romano: I'll let John run through more of the year-end numbers from the balance sheet, but we're very comfortable with where we are in terms of liquidity and debt. Despite the lower market demand, we took action at the right time in 2023 to bolster the balance sheet and ensure we had sufficient liquidity. I'm proud of our team, how they have proactively prepared for a variety of scenarios, and Tronox is very well positioned as we stand today, especially considering the key capital projects we've planned for 2024, which we'll discuss a little bit later on in the call. Turning to slide six, I'll now review a few updates on some of the key sustainability measures. We are nearing the conversion of 40% of our power in South Africa to power from the significant solar project we helped develop in partnership with the Solar Group. This project is one of South Africa's largest solar installations.

John D. Romano: Ill, let John run through more of the year end numbers from the balance sheet, but we're very comfortable with where we are from a liquidity and debt position. Despite the lower market demand. We took action at the right time in 2023 to bolster the balance sheet and ensure we had sufficient liquidity.

John: I'm proud of our team how our team is proactively prepared for a variety of scenarios and Tronox is very well positioned as we stand today, especially considering the key capital projects. We plan for 2024, which will discuss a little bit later on the call.

Speaker Change: Turning to slide six I will now review a few updates on some of the key sustainability initiatives.

Speaker Change: We are nearing the conversion of 40% of our power in South Africa to power from the significant solar project, we help develop in partnership with the Solar group. This project is one of South Africa's largest solar installations, we expect to receive power in the coming months, which will significantly reduce our carbon emissions globally and marked the first significant step.

John D. Romano: We expect to receive power in the coming months, which will significantly reduce our carbon emissions globally and mark the first significant step on our journey to net zero in 2050. Renewable power and energy efficiency projects are key to achieving our 2030 greenhouse gas emissions reduction target of 50%. So we're excited to mark such a significant milestone. We have another renewable project in development in South Africa that we hope to provide more details on soon. Also underway are various initiatives to achieve our stated targets towards reducing our waste to external landfill. This includes exploring alternative uses for waste in a number of opportunities, including cement, road base, bricks, and water treatment chemicals.

Speaker Change: On our journey to net zero in 2050.

Speaker Change: Renewable power and energy efficiency projects are key to achieving our 2030 greenhouse gas emissions reduction target of 50%. So we're excited to mark such a significant milestone.

Speaker Change: We have another renewable project and developments in South Africa that we hope to provide more details on soon.

Speaker Change: Also underway are various initiatives to achieve our stated targets towards reducing our waste to access external landfills. This includes exploring alternative uses for waste and a number of opportunities, including cement road base bricks and water treatment chemicals. We're also continuing to evaluate opportunities to extract valuable minerals.

John D. Romano: We are also continuing to evaluate opportunities to extract valuable minerals and metals from waste, including rare earths, scandium, and vanadium. We're excited about the progress we've made and look forward to continuing to updating you on our journey. I'll now turn the call over to John to review some of our financials for the quarter in more detail.

Speaker Change: In metals from waste, including rare Earths scandium in vanadium we're.

Speaker Change: We're excited about the progress we've made and look forward to continuing to updating you on our journey.

Speaker Change: I'll now turn the call over to John to review some of our financials for the quarter in more detail John Thank you John turning to slide seven.

John P. McNulty: Thank you, John. Turning to slide seven, revenue of $686 million increased 6% compared to the prior year, primarily from TIO2 and other product sales. This represented an increase of 4% relative to the prior quarter due to higher Zircon and other product sales. Income from operations was $8 million in the quarter, and we reported a net loss of $56 million.

John: Revenue of $686 million increased 6% compared to the prior year, primarily from CIO to and other product sales. This represented an increase of 4% relative to the prior quarter due to higher zircon and other product sales.

John: Income from operations was 8 million in the quarter, we reported a net loss of $56 million.

John P. McNulty: Our effective tax rate in the quarter was 75%. Despite generating a loss before income taxes, we paid $24 million in taxes in the quarter as a majority of our taxes are paid in South Africa, where we had higher earnings than expected, owing to higher Zircon sales and the sale of a portion of our rare earths tailing deposits. In the majority of our other jurisdictions, we either realize a net loss or have NOL positions. As a result, our adjusted diluted earnings per share was a loss of 38 cents.

John: Our effective tax rate in the quarter was 75% despite generating a loss before income taxes, we paid $24 million in taxes in the quarter as the majority of our taxes are paid in South Africa, where we had higher earnings than expected owing to higher zircon sales and the sale of a portion of our rare Earth tailing deposit.

John: And the majority of our other jurisdictions, we either realized a net loss or have NOL positions.

John: As a result, our adjusted diluted earnings per share was a loss of 38.

John P. McNulty: As previously discussed, our adjusted EBITDA in the quarter was $94 million, and our adjusted EBITDA margin was 13.7%. Free cash flow generated in the quarter was $51 million. Now let's move to slide 8 for a review of our commercial performance. TI2 revenues increased 9% versus the year-ago quarter, driven by a 16% increase in sales volume, a 6% decrease in average selling prices, and an unfavorable product mix impact of 2%. We saw a favorable impact from FX of 1%. Zircon volumes decreased 26% compared to the year-ago quarter, and Zircon pricing was lowered by 11%.

John: As previously discussed our adjusted EBITDA in the quarter was $94 million and our adjusted EBITDA margin was 13, 7%.

John: Free cash flow generated in the quarter was $51 million.

John: Now, let's move to slide eight for a review of our commercial performance.

John: <unk> revenues increased 9% versus a year ago quarter, driven by a 16% increase in sales volume a 6% decrease in average selling prices and unfavorable product mix impact of 2%.

John: We saw a favorable impact from FX of 1%.

John: Zircon volumes decreased 26% compared to the year ago quarter, zircon pricing was lower by 11%.

John P. McNulty: Revenue from other products was $110 million, an increase of 38% compared to the prior year, driven by higher sales of pig iron, ilmenite, and rare earth tailings, as John previously mentioned. Turning to slide nine, I will now review our operating performance for the quarter. Our adjusted EBITDA of $94 million represents a 17% decline year on year driven by lower average selling prices and higher operating costs due to lower production rates. However, this is partially offset by improved sales volume and product mix, payroll exchange rate tailings, and lower freight costs. sequentially, adjusted EBITDA decreased 19%, driven by higher operating costs due to lower production rates and lower product prices.

John: Revenue from other products was $110 million, an increase of 38% compared to the prior year driven by higher sales of pig iron ilmenite and warehouse tailings that John previously mentioned.

Speaker Change: Turning to slide nine I will now review, our operating performance for the quarter our.

Speaker Change: Our adjusted EBITDA of 94 million represents a 17% decline year on year, driven by lower average selling prices and higher operating costs due to lower production rates.

Speaker Change: This was partially offset by improved sales volume and product mix favorable exchange rate tailwind and lower freight costs.

Speaker Change: Sequentially adjusted EBITDA decreased 19% driven by higher operating costs due to lower production rates and lower product pricing.

Speaker Change: This was partially offset by improvement in sales volume and product mix exchange rate tailwind and lower freight costs.

Speaker Change: As we've mentioned previously we brought down our operating rates in order to manage inventory and cash which had an unfavorable impact on our costs in the fourth quarter and across the year.

John P. McNulty: This is partially offset by improvement in sales volume in product mix, exchange rate tailwinds, and lower freight costs. As we mentioned previously, we brought down our operating rates in order to manage inventory and cash, which had an unfavorable impact on our costs in the fourth quarter and across the year. Quarter over quarter, production cost increases of $40 million included $16 million of higher costs associated with lower adsorption and higher input costs.

Quarter over quarter production cost increases of $40 million included $16 million higher costs associated with lower absorption and higher input costs $12 million of lower cost or market, an idled facility charges due to lower production rates and $9 million higher mining costs.

Speaker Change: Turning to slide 10, I will now review our financial position.

Speaker Change: We ended the quarter with total debt of $2 8 billion and net debt of $2 6 billion. Our net leverage at the end of December was four nine times on a trailing 12 month basis.

John P. McNulty: $12 million of lower cost or market and idle facility charges due to lower production rates and $9 million of higher mining costs. Turning to slide 10, I'll now review our financial position. We ended the quarter with total debt of $2.8 billion and net debt of $2.6 billion.

Speaker Change: While we ended the year with higher debt.

Speaker Change: Here year, the incremental term loan of $350 million raised in the third quarter reinforced the strength of our balance sheet and bolstered available liquidity ahead of anticipated critical vertical integration related capital expenditures.

John P. McNulty: Our net leverage at the end of December was 4.9 times on a trailing 12-month basis. While we ended the year with higher debt than the prior year, the incremental term loan of $350 million raised in the third quarter reinforced the strength of our balance sheet and bolstered available liquidity ahead of anticipated critical vertical integration-related capital expenditures. Our nearest term of significant maturity remains 2028, and we have no financial covenants on our term loans or bonds. Our weighted average interest rate in Q4 was 6.17%.

Speaker Change: Our nearest term a significant maturity remains 2028, and we have no financial covenants on our term loans or bonds.

Speaker Change: Our weighted average interest rate in Q4 was $6 one 7%.

Speaker Change: We maintain interest rate swaps such that approximately 73% of our interest rates are fixed through 2024, and approximately 64% are fixed from 2024 through 2028 aligning with the maturity of our term loan.

Speaker Change: As a result, we do not expect to see our average interest rate increased significantly in the year.

John P. McNulty: We maintain interest rates such that approximately 73% of our interest rates are fixed through 2024, and approximately 64% are fixed from 2024 through 2028, aligning with the maturity of our term loans. As a result, we do not expect to see our average interest rate increase significantly in the year. Total available liquidity as of December 31st was $761 million, including $273 million in cash and cash equivalents, an improvement from our Q3 levels and owing to positive cash generated in the quarter. Capital expenditures totaled $59 million in the quarter.

Speaker Change: Yes.

Speaker Change: Total available liquidity as of December 31 was $761 million, including 273 million in cash and cash equivalents and improvement from our Q3 levels and owing to positive cash generated in the quarter.

Speaker Change: Capital expenditures totaled 59 million in the quarter approximately 65% of this was for maintenance and safety and 35% was for strategic growth projects.

DD&A expense was 69 million for the quarter, we returned 20 million to shareholders in the form of debt then dividends in the quarter.

Speaker Change: I will now turn the call back over to John Romano for some comments on the year ahead, and our outlook John Thanks, John.

John D. Romano: We expect 2024 to see a reversal of several of the trends for the path. The last 18 months on the market, we've already begun to see a pickup in demand for T. Ao two that is more positive than we would see normally at this time of year January is January sales were strong and we're seeing continued strengthening in the market for February and March order books.

John D. Romano: Approximately 65% of this was for maintenance and safety, and 35% was for strategic growth projects. dDNA expense was $69 million for the quarter. We returned $20 million to shareholders in the form of dividends in the quarter. And we'll now turn the call back over to John Romano for some comments on the year ahead and our outlook.

John D. Romano: We expect <unk> pricing to reverse its downward trend and improve as we move through 2024 <unk>.

John D. Romano: Zircon volumes are also continuing to improve from the trough levels realized in July of 2023.

John D. Romano: Thanks, John. We expect 2024 to see a reversal of several of the trends from the past 18 months on the market. We've already begun to see a pickup in demand for TIO2 that is more positive than we would see normally at this time of year. January sales were strong, and we're seeing continued strengthening in the market for February and March order books.

John D. Romano: The magnitude of the recovery will be somewhat dependent on China as it makes up 50% of the total zircon market.

John D. Romano: However, even without that significant shift in China, we're seeing demand recover on the operational side as I mentioned previously we incurred significant costs in 2023 from running our assets at low utilization rates due to soft market demand, we incurred between 25 and $35 million and fixed cost absorption headwinds in each quarter of last.

John D. Romano: We expect TO2 pricing to reverse its downward trend and improve as we move through 2024. Zircon volumes are also continuing to improve from the trough levels realized in July of 2023. The magnitude of the recovery will be somewhat dependent on China as it makes up 50% of the total zircon market. However, even without that significant shift in China, we're seeing demand recover. On the operational side, as I mentioned previously, we incurred significant costs in 2023 from running our assets at low utilization rates due to soft market demand. We incurred between $25 and $35 million in fixed cost absorption headwinds in each quarter of last year.

John D. Romano: Year.

John D. Romano: In 2024, we're already beginning to increase and increase our operating rates in line with demand, which will have a positive impact on our manufacturing cost we.

John D. Romano: We still have high cost inventory to move through the business, which we anticipate will carry partially into the second quarter, but by the second half of the year, we should see margins revert to a more normalized levels. We continue to deploy technology at our sites to reduce cost and improve efficiencies, which will also improve our cost position as we ramp up.

John D. Romano: We are investing in key capital projects to sustain our bertolli vertical integration as well.

John D. Romano: From a growth perspective, our R&D efforts remain focused on product and process innovation to enhance profitability. Additionally, we're continuing to explore opportunities in the rare earth space as rare Earths are already present in the heavy mineral sands, we mine in South Africa, and Australia, we are continuing to explore opportunities to increase value.

John D. Romano: In 2024, we're already beginning to increase our operating rates in line with demand, which will have a positive impact on our manufacturing costs. We still have high-cost inventory to move through the business, which we anticipate will carry partially into the second quarter, but by the second half of the year, we should see margins revert to our more normalized level. We continue to deploy technology at our sites to reduce costs and improve efficiencies, which will also improve our cost position as we ramp up. We are investing in key capital projects to sustain our vertical integration as well. From a growth perspective, our R&D efforts remain focused on product and process innovation to enhance profitability. Additionally, we're continuing to explore opportunities in the rare earth space. As rare earths are already present in the heavy mineral sands we mine in South Africa and Australia, we are continuing to explore opportunities to increase value as these are these highly sought-after minerals.

John D. Romano: As these after these highly sought after minerals. We are also continuing to drive our sustainability initiatives, which not only are critical to preserving our privilege to operate but also support tronox is value proposition and will continue.

John D. Romano: It's a challenge ourselves to be a leader in this regard moving.

John D. Romano: Moving to slide 12, I'd like to spend some time reviewing two of our key capital projects for 2024.

John D. Romano: This year, we'll be investing $130 million in two key mining projects in South Africa to replace our existing mines, which are reaching the end of their lives.

John D. Romano: Investment in these projects were delayed in 2023 to preserve cash given the lower market demand. These.

These investments will maintain our more than $300 a ton advantage relative to market pricing for feedstock. Each project is expected to generate IRR in excess of 30%.

John D. Romano: We are also continuing to drive our sustainability initiatives, which are not only critical to preserving our privilege to operate but also support Tronox's value proposition. And we'll continue to challenge ourselves to be a leader in this regard. Moving to slide 12, I'd like to spend some time reviewing two of our key capital projects for 2024. This year, we'll be investing $130 million in two key mining projects in South Africa to replace our existing mines, which are reaching the end of their lives. Investment in these projects was delayed in 2023 to preserve cash given the lower market demand.

John D. Romano: These are critical project to maintain Tronox is vertically integrated strategy that will continue to enhance our position as a leading T O two producer and the induced in the industry's leading financial performance.

John D. Romano: Turning to slide 13, I'll review, our outlook for the quarter and the year ahead and more detail.

John D. Romano: On the first quarter for 24, we expect T O two volumes to increase 12% to 16% in zircon volumes to increase 15% to 30% both compared to the fourth quarter. We expect both T O two and zircon pricing to remain relatively flat in the quarter.

John D. Romano: While we expect a headwind from non repeating sales in other products. This will be offset by some improvement on fixed costs due to our higher operating rates. As a result, we're expecting Q1 2024, adjusted EBITDA to be $100 million to $120 million and adjusted EBITDA margins to be in the mid teens.

John D. Romano: These investments will maintain our more than $300 a ton advantage relative to market pricing for feedstock. Additionally, each project is expected to generate IRRs in excess of 30%. These are critical projects to maintain Tronox's vertically integrated strategy that will continue to enhance our position as a leading TIO2 producer and the industry's leading financial performance. Turning to slide 13, I'll review our outlook for the quarter and the year ahead in more detail. In the first quarter of 24, we expect TIO2 volumes to increase 12 to 16% and Zircon volumes to increase 15 to 30%, both compared to the fourth quarter. We expect both TIO2 and Zircon prices to remain relatively flat in the quarter.

While we're not providing full year EBITDA guidance.

John D. Romano: We did want to provide a view on our expectations for our 24 cash uses.

John D. Romano: Our capital expenditures are expected to be approximately $395 million for the year. Our net cash taxes are expected to be less than 10 million as the significant capital expenditures in South Africa, our deductible. Our net cash interest expense is expected to be $145 million and we're expecting working capital to be a tailwind.

John D. Romano: And the magnitude of that tailwind will depend on the significant how significant the market recovery. This year. Our strategy remains to remains largely unchanged. We're prioritizing investments in the business that are critical to furthering our strategy and driving value from our vertically integrated portfolio. Even at this investment level, we expect to generate positive free cash flow for.

John D. Romano: While we expect a headwind from non-repeating sales and other products, this will be offset by some improvement in fixed costs due to our higher operating rights. As a result, we're expecting Q1 2024 adjusted EBITDA to be $100 to $120 million and adjusted EBITDA margins to be in the mid-teens. While we're not providing full-year EBIDTA guidance, we did want to provide a view on our expectations for our 24 CASUs. Our capital expenditures are expected to be approximately $395 million for the year. Our net cash taxes are expected to be less than $10 million, as the significant capital expenditures in South Africa are deductible. Our net cash interest expense is expected to be $145 million.

John D. Romano: The year.

John D. Romano: We will see we will also be focused on bolstering our liquidity and as the market recovers, we'll look to resume debt Paydown, we will continue to evaluate strategic high growth opportunities as they arise currently we're focusing on the rare Earth space and we will keep the market updated on any key developments.

Speaker Change: That will conclude our prepared remarks, and we'll now move to Q&A portion of the call. So I'll hand, the call back over to the operator to facilitate operator.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.

Speaker Change: Here are three Tom prompt acknowledging a request in your questions will be pulled in the order. They are received should you wish to decline from the polling process. Please press star followed by the two.

Speaker Change: You are using a speaker phone please lift the handset before pressing any key one moment. Please for your first question.

John D. Romano: And we're expecting working capital to be a tailwind, and the magnitude of that tailwind will depend on how significant the market recovery this year is. Our strategy remains largely unchanged.

Speaker Change: Your first question comes from John Mcnulty with BMO capital markets. Please go ahead.

John P. McNulty: Yes. Good morning, Thanks for thanks for taking my question.

John P. McNulty: So I guess the first one would just be you've got a relatively positive outlook.

John D. Romano: We're prioritizing investments in the business that are critical to furthering our strategy and driving value from a vertically integrated portfolio. Even at this investment level, we expect to generate positive free cash flow for the year. We will also be focused on bolstering our liquidity, and as the market recovers, we'll look to resume debt paydown. We will continue to evaluate strategic high-growth opportunities as they arrive.

John P. McNulty: On the volume front for <unk> as we look to the first quarter is there any geographic deviation in terms of in terms of where you're seeing kind of that outsized or above normal demand.

John P. McNulty: Or is it is it relatively broad how should we think about that.

Speaker Change: Yes. Thanks for the question so look in the first quarter, it's relatively broad we're seeing it across all the sex sectors.

Speaker Change: We mentioned that we didn't we saw a little bit more seasonality in the fourth quarter and the North American market and we're starting to see the north American market pick up a bit more so that increase in Q1 sales.

John D. Romano: Currently, we're focusing on the rarer space, and we will keep the market updated on any key developments. That will conclude our prepared remarks, and we'll now move to the Q&A portion of the call. So I'll hand the call back over to the operator to facilitate. Operator?

Speaker Change: Normally Q1, and Q4 would typically be pretty similar so.

Speaker Change: We do believe that based on what we're seeing in the field from our customers we're confidently.

We're confident that the Destocking has largely run its course, and we're seeing customers restocking and moving into more normal buying patterns. I think Additionally, historically, our business has kind of led in and out of economic transitions and we really do believe we're on the front end of a recovery and this is having a I'd say.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be answered in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any.

Speaker Change: A more positive impact on our outlook for the entire year.

Speaker Change: Got it Okay fair enough and then maybe just speaking to the fixed cost absorption. This year you highlighted in one of the slides at 25% to $35 million per quarter hit. So I mean, we're talking like $100 million to $150 million for the year, which is pretty chunky I guess is there a way to think about.

Operator: One moment, please, for your first question. The first question comes from John McNulty with BMO Capital Markets. Please go ahead.

John D. Romano: Yeah, good morning. Thanks for taking my question. So I guess the first one would just be, you know, you've got a relatively positive outlook, as you know, on the volume front for to as we look to the first quarter. Is there any geographic deviation in terms of where you're seeing kind of that outsized or above normal demand, or is it relatively broad?

Speaker Change: What volume levels, you need or where what we need to see in 2024 to completely erase that or like is there kind of a rule of thumb that we should be thinking about.

Speaker Change: As that as that kind of fixed cost absorption headwind dies down.

Speaker Change: They look at it.

Speaker Change: Great question, I'll start and John maybe you can add onto it historically.

Speaker Change: Historically.

John: While the wind the clock back four quarters, we were I think 18 months in a row consistently above 20% EBITDA margins and we quoted something just below 14%.

John D. Romano: How should we think about that? Yeah, thanks for the question. So look, in the first quarter, it's relatively broad; we're seeing it across all the sectors. We mentioned that we didn't see a little bit more seasonality in the fourth quarter in the North American market, and we're starting to see the North American market pick up a bit more. So that increase in Q1 sales, you know, normally, Q1 and Q4 would typically be pretty similar. So we really do believe that based on what we're seeing in the field from our customers, we're confidently confident that the destocking has largely run its course, and we're seeing customers restocking and moving into more normal buying patterns. I think additionally, you know, historically, our business has kind of led in and out of economic transitions, and we really do believe we're on the front end of a recovery. And this is having, I'd say, a more positive impact on our outlook for the entire year.

John: So running at the rates that we've been running at which again, we made the point that it's lower than what we've ever historically run we believe that where we're ramping up right now and we're not at full capacity, we're ramping up the assets that as we move through the first quarter will start to get to volumes.

John: I'd say capacity utilization, which should get us back to I would say.

John: Mid to normal run rates on EBITDA margin, but we also have to think about the inventory that we have got to work through so I made the reference on the call that we've got inventory on the balance sheet, we're going to have to work through that its probably going to work its way probably halfway through the second quarter, but when we get in the second half of the year you should start to think about those <unk>.

John D. Romano: Okay, fair enough. And then maybe just speaking to the fixed cost absorption issue you highlighted on one of the slides, you know, a $25 to $35 million per quarter hit. So, I mean, we're talking about $100 to $150 million for the year, which is pretty chunky. I guess, is there a way to think about what volume levels you need or what we need to see in 2024 to completely erase that? Or is there kind of a rule of thumb that we should be thinking about as that kind of fixed cost absorption headwind dies down? That's a great question. I'll start, and John, maybe you can add on to it.

John: Low to mid 20 kind of run rates on EBITDA margin and that's without a lot of movement on price.

Speaker Change: And John I would add to that that on the mining side of our business remember last year, we mentioned that the drop was so significant that we had to slow down our mine and our mine and smelter our high fixed cost operation we're back to running those assets at full capacity in 2000.

Speaker Change: Four.

John: Got it okay. No. That's that's very helpful. Thank you very much for the color.

John: Your next question comes from David Begleiter with Deutsche Bank. Please go ahead.

John D. Romano: So, you know, historically, wind the clock back four quarters, we were, I think, 18 months in a row, consistently above 20% EBITDA margins, and we quoted something just below 14%. So, you know, running at the rates that we've been running at, which again, we made the point that it's lower than what we've ever run historically. We believe that where we're ramping up right now, and we're not at full capacity, we're ramping up the assets, that as we move through the first quarter, we'll start to get to volumes and, I would say, capacity utilization, which should get us back to, I would say, mid to normal run rates on EBITDA margin. But we also have to think about the inventory that we've got to work through.

David Begleiter: Thank you good morning.

David Begleiter: John you mentioned the prospects for higher pricing tier two this year, what do you think it will manifest first mark region and by end markets and customers.

David Begleiter: So we typically don't give a lot of regional view on that but I would expect.

Speaker Change: Laurie well, what I mentioned in the first quarter as pricing was going to be relatively flat both on zircon and on Tio too and we did largely see rollovers moving into the first quarter of 2020 for I would suspect that as we start to migrate out of the first quarter, we will start to look at.

Speaker Change: Pricing opportunities across all regions, but theres a lot of activity. We've got a lot of questions about the anti dumping everything that we're talking about right now has nothing to do with anti dumping right anti dumping if it actually happens.

John D. Romano: So I made the reference on the call that we've got inventory on the balance sheet, we're going to have to work through that, it's probably going to work its way through probably halfway through the second quarter, but when we get in the second half of the year, you should start to think about those normal low to mid 20 kind of run rates on EBITDA margin, and that's without a lot of movement on price. And John, I would add to that on the mining side of our business. Remember, last year, we mentioned that the drop was so significant that we had to slow down our mine, and our mine and smelter, our high fixed cost operation, were back to running those assets at full capacity in 24. I got it. Okay. No, that's very helpful.

Speaker Change: And it gets input it in provisional duties come in you know that could be something additive to this but what we're talking about right. Now is just generally what we're seeing in the market.

Speaker Change: We would see these are all the signs and indicators that would indicate pricing would start to move up it's not in the first quarter, but we're hopeful we'll start to see some sort of movement as we move into Q2.

Speaker Change: And John on the anti dumping are you seeing any change in buyer behavior yet.

John: Because of these.

John: <unk>.

John: And.

John: What's the timeline from your perspective for the for the EC to Act here.

John D. Romano: Thanks very much for the call. Your next question comes from David Begleiter with Deutsche Bank. Please go ahead. Thank you. Good morning.

Yes, so maybe on the timeline the formal investigation.

John: From the commission.

John D. Romano: John, you mentioned the prospects for higher pricing in TO2 this year. What do you think will manifest first in what region and by what end market? So we typically don't give a lot of regional views on that, but I would expect, you know. Well, what I mentioned in the first quarter is that pricing was going to be relatively flat, both on Zircon and on TIO2. And we did largely see rollovers moving into the first quarter of 2024. I would suspect that as we start to migrate out of the first quarter, we'll start to look at pricing opportunities across all regions. And there's a lot of activity. We've got a lot of questions about anti-dumping. Everything that we're talking about right now has nothing to do with anti-dumping.

John: What happened was the coalition coalition that was formed back in November of 23, when the dumping suit was filed.

John: We would expect a formal investigation to conclude in the second quarter and under the process.

John: Final recommendation won't happen until the fourth quarter. However, there could be a possibility that provisional duties could get put in place. Some time as early as the second quarter, but that's yet to be seen as far as are we seeing any real significant buying change I'd say, we're seeing a little bit but.

John: Nothing significant there is some I'd say export activity that's going on so that's in line with what we would've expected as a dumping suit was filed in EU.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Josh Spector with UBS. Please go ahead.

John D. Romano: Anti-dumping, if it actually happens, and it gets inputted and provisional duties come in, that could be something additive to this. But what we're talking about right now is just generally what we're seeing in the market. We would see, these are all the signs and indicators that would indicate pricing would start to move up. It's not in the first quarter, but we're hopeful we'll start to see some sort of movement as we move into Q2. I'm John Allen on the anti-dumping issue. Are you seeing any change in barrier behavior yet? These are the names of those involved in this investigation.

Speaker Change: Hey, guys. This is James Cameron on for Josh.

James Cameron: Thanks for taking my question.

James Cameron: Just if we go back to kind of the.

James Cameron: Comments, you gave on the project.

James Cameron: Mining projects you're doing in.

James Cameron: South Africa.

James Cameron: Can you just give a little color as to the rationale behind moving forward with them now as opposed to.

James Cameron: Once we've gotten back to kind of a more steady state I mean, it seems like with with the with the mining rates haven't come down last year.

John D. Romano: And hey, what's the timeline? http://TheBusinessProfessor.com Yeah, so maybe on the timeline, the formal investigation from the commission, you know, what happened was the coalition. This was a coalition that was formed back in November of 23, when the dumping suit was filed. We would expect the formal investigation to conclude in the second quarter. And under the process that, you know, the final recommendation won't happen until the fourth quarter. However, there could be a possibility that provisional duties could get put in place sometime as early as the second quarter, but that's yet to be seen. As far as we're seeing any real significant buying changes, I'd say we're seeing a little bit, but nothing significant. There's some, I'd say export activity that's going on that's in line with what we would have expected as a dumping suit was filed in each. Your next question comes from Josh Spector with UBS. Please go ahead. Hey guys, this is James Cannon. I'm for Josh.

James Cameron: There would be additional capacity to kind of.

James Cameron: Lift rates elsewhere in the system and maybe not require that capex at this stage.

James Cameron: So last year, we delay those projects.

James Cameron: Both projects in South Africa, one was a little bit further along than the other one so we have to run our business on a long term in the mining projects actually do require a longer view than quarterly.

Earnings So we feel that it was an appropriate delay what we did last year. We spent some time bolstering our liquidity last year for that specific purpose to make sure that we had the ability to invest in these assets because at the end of the day as I mentioned on the call. These are actually replacing mines that are coming to the end of their lives. So.

James Cameron: We want to maintain our zircon volumes in the ilmenite to feed our smelters. These are long term projects and we've got a five year plan for our T O two business, but more like a 20 year plan to manage our mining. So we feel that what we're doing at this particular stage is not only appropriate it's needed to make sure. We can maintain our long term business.

John D. Romano: Thanks for taking my question, um, If we go back to kind of the..., doing in South Africa. Can you just give a little color as to the rationale behind moving forward with them now, as opposed to... Once we've gotten back to kind of a more steady state, I mean, it seems like with the mining rates having come down last year, there would be additional capacity, list rates elsewhere in the system, and maybe not require that CapEx at this stage. Look, so last year, we delayed those projects, both projects in South Africa, one was So, you know, we have to run our business for the long term. And the mining projects actually do require a longer view than quarterly earnings.

Speaker Change: Okay. Thanks, and then just on timing with those.

Speaker Change: Can you give some commentary on when you anticipate those to start producing and whether or not there'll be any drag on opex or absorption as those two startup.

Speaker Change: So as both Mike and both of those mines there'll be it.

Speaker Change: Basically a transition from the end of the mind that the previous one to a transition to the new one so there shouldn't be a lot of lag or lead time moving in it's all timing as we move out of one body of war will be moving into another one so there shouldnt be a lot of transition.

Speaker Change: Obviously, as we're bringing up some of the mining equipment, there could be a little bit of transition, but I don't we don't expect that to be a drag.

John D. Romano: So, we feel that it was an appropriate delay. What we did last year, we spent some time bolstering our liquidity last year for that specific purpose, to make sure that we had the ability to invest in these assets. Because at the end of the day, as I mentioned on the call, these are actually replacing mines that are coming to the end of their life.

Speaker Change: And I think as we start new mines, obviously theres the whole resource there and we do optimize to bring out the higher value or earlier on so we would expect and when those mines come online to see some positive benefit.

John D. Romano: So if we want to maintain our Zircon volumes and the ilmenite to feed our smelters, these are long-term projects. And we've got a five-year plan for our TiO2 business, but more like a 20-year plan to manage our mining. So we feel that what we're doing at this particular stage is not only appropriate, but it's needed to make sure we can maintain our long-term business. Okay, thanks. And then just on timing with those.

Speaker Change: Okay, great. Thanks.

Speaker Change: Your next question comes from Duffy Fischer with Goldman Sachs. Please go ahead.

Duffy Fischer: Yes, good morning, guys.

Duffy Fischer: If you could your Capex assumption for this year is 395 your operating cash flow last year was 184 sort of be free cash flow positive. This year that means you need to grow your operating cash flow a little over $200 million. This year can you just walk through how you see those buckets coming through how much of that would be.

John D. Romano: Can you give some commentary on when you anticipate those to start producing and whether or not there will be any drag on op-ex or absorption as those do start up? So in both of those mines, there'll be basically a transition from the end of the mine of the previous one to a transition to the new one. So there shouldn't be a lot of lag or lead time moving in. It's all timing.

Duffy Fischer: An improvement in EBITDA, how much of that would be things like improvement in working capital anything else on the cash flow statement kind of before the operating activities that would get us at $200 million plus.

Speaker Change: Yeah Duffy thanks for that question and we arent guiding for the full year. So.

John D. Romano: As we move out of one body of ore, we'll be moving into another one, so there shouldn't be a lot of transition. Obviously, as we're bringing in some of the mining equipment, there could be a little bit of transition, but we don't expect that to be a drag. You know, I think as we start new minds, obviously, there's a whole resource there, and we do optimize to bring out, you know, the higher value or earlier on. So, you know, we would expect when those minds come online to see some positive benefit. Okay, great. Thanks. Your next question comes from Duffy Fischer with Goldman Sachs. Please go ahead.

Duffy Fischer: From an earnings perspective, we are optimistic obviously expect an improvement year over year.

And it ultimately our free cash flow the scope and size of that positiveness, we expect will depend on market dynamics, there, but from a working capital perspective, that's the earnings and working capital are the biggest drivers obviously, we got it on interest negative $145 million taxes less than $10 million and as you mentioned capex.

Duffy Fischer: 395 million. So we do expect both free cash flow and working capital to be positive.

John D. Romano: Yeah, good morning, guys. If you could, your CapEx assumption for this year is $395. Your operating cash flow last year was $184. So to be free cash flow positive this year, that means you need to grow your operating cash flow a little over $200 million this year. Can you just walk through how you see those buckets coming through?

Duffy Fischer: From a working capital perspective, we do see.

Duffy Fischer: Obviously, if sales are going up they are is going to be a hurt but that obviously is a good working capital use there and we do see inventory.

John D. Romano: How much of that would be an improvement in EBITDA? How much of that would be things like improvement in working capital? Anything else on the cash flow statement kind of before the operating activities that would get us that $200 million plus? Yeah, Duffy, thanks for that question.

Duffy Fischer: We are building some inventory in that.

Duffy Fischer: With inventory and AAR will all depend on top line sales growth, we do expect payables as well to be a source of cash as we are actively managing that throughout the year. So.

Duffy Fischer: And that's kind of where we are on free cash flow and just generically from the operating side again.

John D. Romano: And we aren't guiding for the full year. So, you know, from an earnings perspective, we are optimistic and obviously expect an improvement year over year. And ultimately, our free cash flow, the scope and size of that positiveness we expect will depend on market dynamics there. But from a working capital perspective, earnings and working capital are the biggest drivers. Obviously, we got it on interest, negative 145 million taxes, less than 10 million.

Duffy Fischer: We talked a couple of times about running it I think we didn't throw numbers up 70% capacity utilization for over a year.

Duffy Fischer: And as we started to ramp up those assets early as early as December of last year and into the first quarter now obviously little teething as you start to move up from those lower rates. So it wasn't super-smooth to get to where we are today, but now those assets are running.

Duffy Fischer: So when you think about that 25 to 35 million a quarter that we talked about as a negative due to fixed cost absorption will start to see similar results and some of these unplanned outages that we have will be added onto that so there'll be a significant portion of that so when we think about the growth. It's.

John D. Romano: And as you mentioned, capex of 395 million. So we do expect both free cash flow and working capital to be positive. You know, from a working capital perspective, we do see, obviously, sales are going up, the AR is going to be a hurt, but that obviously is a good working capital use there. And we do see inventory, you know; we are building some inventory, and that play with inventory and AR will all depend on, you know, top-line sales growth. We do expect payables as well to be a source of cash as we are actively managing that throughout the year.

Duffy Fischer: Obviously prices and opportunity, but running our assets at grades that are at a more normalized level, which are in line with what we've historically seen on EBITDA margins as I mentioned before it's going to be a big driver in our profitability.

Duffy Fischer: Okay. Thank you and then there have been several reports out of South Africa with two of their larger unions in the mining industry kind of fighting and theres been some kidnapping and stuff like that.

John D. Romano: So that's kind of where we are on free cash flow. And just generically, from the operating side, again, we talked a couple of times about running at, you know, I think we've even thrown numbers up, 70% capacity utilization for over a year. And as we started to ramp up those assets early, as early as December of last year and into the first quarter, you know, obviously, a little teething as you start to move up from those lower rates. So it wasn't super smooth to get to where we are today, but now those assets are running.

Duffy Fischer: Do you have both of those unions at your operation or are you kind of a single Union and then again. So are you seeing any issues with your operations or any of the other tier two operations in South Africa.

Speaker Change: Duffy I mean I can tell you we only have one union a case and we're lucky to be in an area, where there is no reevaluate and no issue between the Union look.

Speaker Change: We have always stated that our approach in South Africa is to work with talk community all worker or nut remote worker. They are local or they are a member of the community where our mine and smelter are located and that makes a huge difference with the dynamic.

John D. Romano: So when you think about that 25 to 35 million a quarter that we talked about as a negative due to fixed cost absorption, we'll start to see similar results. And some of these unplanned outages that we have will be added onto that. So when we think about growth, obviously price is an opportunity, but running our assets at rates that are at a more normalized level, which are in line with what we've historically seen on EBITDA margins, as I mentioned before, it's going to be a big driver of our profitability. Okay, thank you. And then there have been several reports out of South Africa, with two of their larger unions in the mining industry kind of fighting, and there's, I guess, been some kidnapping and stuff like that.

Speaker Change: Often.

Speaker Change: And all of those issue that we heard about South Africa are related to.

Speaker Change: Worker are like.

Speaker Change: Remote and almost in all store.

Speaker Change: And.

Speaker Change: And we don't have that issue at all our mines.

Speaker Change: Great. Thank you guys.

Speaker Change: Your next question comes from Jeff <unk>.

Jeff: At Costco with Jpmorgan. Please go ahead.

Jeff: Thanks very much.

Jeff: I think your tier two volume for the past two years.

Jeff: About 15% each year.

Speaker Change: How do you think the industry shrank over 2022 and 'twenty three.

John D. Romano: Do you have both of those unions at your operation, or are you kind of a single union? And then, you know, again, are you seeing any issues with your operations or any of the other TIO2 operations in South Africa? Duffy, I mean, I can tell you we only have one union in our case, and we're lucky to be in an area where there is no rivalry and no issues between the unions.

Speaker Change: How did you do compare it to the overall industry.

Speaker Change: Yes, Thanks, Jeff.

Speaker Change: Look you're right if you look at our lash.

Speaker Change: The last two years I think our volumes were down roughly 27%, so 15% of years pretty much accurate.

Speaker Change: And China, obviously grew I know you take.

Speaker Change: And interest in paying a lot of attention to the exports coming out of China.

John D. Romano: Look, we have always stated that our approach in South Africa is to work with our community; our workers are not remote workers, they are local, they are members of the community where our mine and smelter are located, and that makes a huge difference to the dynamics. Often, all those issues that we heard about South Africa are related to where workers are remote and hostile, and we don't have that issue at our mine. Great Thank you, guys. Your next question comes from Jeff Zekauskas with J.P. Morgan. Please go ahead.

Speaker Change: Anna has taken a significant growth specifically in Asia Pacific.

Speaker Change: India has become a significant importer of Chinese material.

Speaker Change: Lot of Asia Pacific So not just in China. So I do think that over time that that we probably lost a little bit of share to the Chinese and we've done that based on where we feel like it just was not competitive.

Speaker Change: That being said I think others, probably we're hurt a bit more than the Chinese were our I think our chloride capacity has provided us an opportunity to avoid some of that that being said, we feel like we can compete directly with the Chinese on there's lots going on we've already talked about with some of the efforts that are trying to manage that.

John D. Romano: Ah, thanks for... I think your TIO2 volume for the past was down about 15% each year. How do you think the industry shrank over 2000? How did you do compared to the overall?

John D. Romano: Yeah, thanks, Jeff. Um, look, you're right. If you look at our volumes over the last two years, I think our volumes were down roughly 27%. So 15% of years is pretty much accurate. And China obviously grew.

Speaker Change: The European market, but I would suspect that the market is still growing China took a disproportional share of that growth over the last couple of years.

John D. Romano: I know you take an interest in paying a lot of attention to the exports coming out of China. China has achieved significant growth, specifically in the Asia Pacific region. You know, India has become a significant importer of Chinese material, a lot of Asia Pacific, so not just in China. So I do think that, over time, I think we've probably lost a little bit of share to the Chinese. And we've done that based on where we feel like it just was not competitive.

Speaker Change: Okay. Thanks.

Speaker Change: Thank you for that and can you can you just give us sort of a status report on project neutral on.

Speaker Change: That is.

Speaker Change: How much more is still to be spend what are the savings been what can the what could the savings be where does all of that staff.

Speaker Change: Yeah. So for 2024, we've still got about $20 million to spend.

John D. Romano: That being said, I think others probably were hurt a bit more than the Chinese were; I think our chloride capacity has provided us with an opportunity to avoid some of that. That being said, we feel like we can compete directly with the Chinese. There's lots going on. We've already talked about some of the efforts that are trying to manage that in the European market. But I would suspect that the market is still growing, and China took a disproportional share of that growth over the last couple of years. Thank you for that.

Speaker Change: So we're going through some additional launches of the S. Four Hana.

Speaker Change: And in Asia Pacific.

Speaker Change: Early as July of this year, so we're still working through that process.

And I don't know John you, maybe talk a little bit more some of the upsides as far as what we're seeing an opportunity but there are we think about automated process control toys, which has shown us is operational information system. All those things are being utilized to extract more out of our assets I think early on that there was a fair amount of.

John D. Romano: And can you can you just give us sort of a status report on the project, that is, how much more is still to be spent and what of the savings? What can this, what could? We're just all.

Speaker Change: Additional value that was coming from volume, which we haven't seen yet so we would start to see that I would say probably more towards the end of this year and early into next but John Yes, John that's exactly right. I mean, we still do believe in the benefits that we're going to see from neutron we quoted it historically 150 to $200 per.

John D. Romano: Yeah, so for 2024, we've still got about 20 million to spend. So we're going through some additional launches of S4 HANA in Asia Pacific as early as July of this year. So we're still working through that process. And I don't know, John, you could maybe talk a little bit more about some of the upsides as far as what we're seeing as an opportunity, but there are, you know, we think about automated process control toys, which is Tronox's operational information system, all those things are being utilized to extract more out of our assets. I think early on, there was a fair amount of additional value that was coming from volume, which we haven't seen yet. So we would start to see that, I'd say, probably more towards the end of this year and early in the next. But, John?

Speaker Change: Tun.

Speaker Change: And a big portion of that we did capture already from procurement savings, although that was mass of loaded by the significant escalation that we've had over the past couple of years.

Speaker Change: But from a volume perspective, we said those are on hold but.

Speaker Change: Frankly, we think that some of those benefits will accelerate as we are bringing up our assets.

Speaker Change: So we do expect to still be within that range.

Speaker Change: Sleep well, we only have deployed as John mentioned in Asia Pacific. So we will need to from a CIS.

Systems perspective, but we have deployed from some of the other.

John D. Romano: Yeah, no, John, that's exactly right. I mean, we still do believe in the benefits that we're going to see from Neutron. We quoted it historically at $150 to $200 per ton, and a big portion of that we did capture already from procurement savings, although that was exacerbated by the significant escalation we've had over the past couple years. But from a volume perspective, we said those weren't whole, but, you know, Frankly, we think that some of those benefits will accelerate as we are bringing up our assets. So we do expect to still be within that range. You know, obviously, we only have them deployed, as John mentioned, in Asia Pacific.

Speaker Change: Operating.

Speaker Change: Enhancements.

Speaker Change: Multiple sites. So we do expect to see those benefits from a volume perspective, and this is Jennifer just if I can add we are seeing benefits at a site level from the deployment of some of the technologies like automated process control.

Jennifer Gunther: So for example, we're seeing reduced coke consumption in our chlorinated.

Speaker Change: When you look at our like for like comparison on the volumes produced it's just a bit masked because of the low run rates that we're operating at but for example that did have a positive effect on <unk>.

<unk> THC emissions it reduced our intensity because we're more efficient for the tons are producing so we are capturing benefits not all the necessarily on the P&L, we're seeing them on the sustainability side of the business, but as we ramp our assets back up we would expect to consume lower raw materials like coke in our chlorinate errors for.

Jennifer Gunther: So we will need to, from a systems perspective, but we have deployed some of the other, you know, operating enhancements at multiple sites. So we do expect to see those benefits from a volume perspective. And this is Jennifer.

John D. Romano: Just if I can add, we are seeing benefits at a site level from the deployment of some of these technologies, like automated process control. So, for example, we're seeing reduced coke consumption in our chlorinators. When you look at a like for like comparison of the volumes produced, it's just a bit masked because of the low run rates that we're operating at. But, for example, this did have a positive effect on our GHG emissions. It reduces our intensity because we're more efficient for the tons we're producing.

Speaker Change: Per ton of Tio too and this should translate to benefits on that on the P&L.

Speaker Change: So the spending is essentially done north of $20 million more more to go I was something relatively small, but as you ramp up.

Speaker Change: Should see the benefits.

Speaker Change: That's correct yes.

Speaker Change: Yes, that's correct and just to Jennifer's point I mean, the whole idea about that one automated process control on our chlorinated we have 24 across the system and last year I think we finalized the implementation of all of that across the entire system. So again as we start to ramp up the assets will start to get a lot more of that value as Jennifer noted.

John D. Romano: So we are capturing benefits, not all of them necessarily on the P&L. We're seeing them on the sustainability side of the business. But as we ramp our assets back up, we would expect to consume lower raw materials like coke in our chlorinators per ton of PO2, and this should translate to benefits, you know, on the P&L. So the spending is essentially done, or this $20 million more should go. I mean, something relatively small, but as you ramp up, we should see the benefits. Is that the general idea? That's correct. Yeah, that's correct. And just to Jennifer's point, I mean, the whole idea about that one automated process control on our chlorinators; we have 24 across the system.

Speaker Change: Yes, maybe if I can sneak in one more question can you can you talk about what's going on with chlorine prices and what you what you expect for the year.

Speaker Change: And so.

Speaker Change: What I can say is that our chlorine prices have continued to move in a positive direction.

Speaker Change: On the downside so.

Speaker Change: Corium has very different depending upon the region. So.

Speaker Change: And then in Saudi Arabia, we make our own chlorine.

Speaker Change: In Australia, we have a lot of purpose built plants, but in North America, we buy merchant chlorine and we've seen what I would say is a significant reduction in Q4 and in Q1 on chlorine prices, which is going to have a positive impact as well.

John D. Romano: And last year, I think we finalized the implementation of all of that across the entire system. So again, as we start to ramp up the assets, we'll start to get a lot more of that value, as Jennifer noted.

Speaker Change: Okay, great. Thank you so much.

Speaker Change: Your next question comes from Mike <unk> with Barclays. Please go ahead.

John D. Romano: Can you talk about what's going on with chlorine prices? What you expect. And so, what I can say is that our chlorine prices have continued to move in a positive direction on the downside. So, you know, chlorine is very different depending upon the region.

Mike: Great. Thank you good morning, guys.

Mike: The first question what are you expecting from zircon pricing outlook.

Mike: So I think I mentioned in the previous or in my prepared comments for the fourth quarter.

John D. Romano: So, you know, in Saudi Arabia, we make our own chlorine. In Australia, we have a lot of purpose-built plants. But in North America, we buy merchant chlorine.

Mike: Although the first quarter, we saw rollover on pricing so.

Mike: There was actually a slight bump up in price from Q1 to Q from Q4 to Q1, but that's all mix. So in the first quarter, we're seeing flat pricing and look at a lot of it is going to depend on how the market continues to evolve July of 2023 was a very low point, but that was the bottom and we've seen the market continued to improve.

John D. Romano: And we've seen what I would say is a significant reduction in Q4 and in Q1 on chlorine prices, which is going to have a positive impact as well. Your next question comes from Mike Lighthead with Barclays. Please go ahead.

John D. Romano: Great. Thank you. Good morning, guys.

Mike: Q1, or Q4 sales were up 82%.

John D. Romano: First question, what are you expecting from Zircon pricing? So I think I mentioned in previous reports or in my prepared comments for the fourth quarter that, over the first quarter, we saw a rollover on pricing. So, you know, there was actually a slight bump up in price from Q1, from Q4 to Q1, but that's all mixed. So, in the first quarter, we're seeing flat pricing. And look, a lot of it's going to depend on how the market continues to evolve. July of 2023 was a very low point, but that was the bottom, and we've seen the market continue to improve. Q1 or Q4 sales were up 82%.

Mike: Forecasted in the prepared comments, 15% to 30% additional increase in the first quarter.

That big swing has a lot to do with whether a big bulk shipments actually going to go this quarter or not.

Mike: All of that growth is on the back of not much growth in the ceramic industry in China, which is about 50% of the market. So we're seeing the market recover we believe that Destocking has run its course customers are buying again and we're starting to see an uplift.

Mike: Even in China, and the non ceramic applications. We started to see restocking occurs we believe Destocking has run its course, there as well so all of that would indicate that as we move through the year, we should start to see positive movements in zircon pricing, but it's a little bit too early to provide a clear forecast on that.

John D. Romano: We forecasted in the prepared comments 15% to 30% additional increase in the first quarter. That big swing has a lot to do with whether a big bulk shipment is actually going to go this quarter or not. All of that growth is on the back of not much growth in the ceramic industry in China, which is about 50% of the market. So we're seeing the market recover. We believe that de-stocking has run its course.

Speaker Change: Great. Thank you and then again I apologize if I missed it but what's the latest update on design or are you still expecting to get the full repayment in kind and was the technical service agreement extended again or did it roll off.

John D. Romano: Customers are buying again, and we're starting to see an uplift. Even in China, for non-ceramic applications, we have started to see restocking occur. So, we believe de-stocking has run its course there as well. All of that would indicate that, as we move through the year, we should start to see positive movements in Zircon prices, but it's a little bit too early to provide a clear forecast on that yet. Great, thank you. And then again, I apologize if I missed it, but what's the latest update on Jezan?

Speaker Change: Yeah. So look we're still working with us on the debt is due in January of 'twenty five we continue to get slag in lieu of and that slag is actually going towards the payment of the debt.

Speaker Change: And there's not much change in our agreement with them at this particular stage Soc still continuing to work with them.

Speaker Change: And.

Speaker Change: This lag that we're getting is largely going down to pay down debt.

John D. Romano: Are you still expecting to get the full repayment in kind? And was the technical service agreement extended again, or did it roll off? Yeah, so look, we're still working with Jizan. The debt is due on January 25.

Speaker Change: Okay. Thank you.

Speaker Change: Your next question comes from Hassan Ahmed with Alembic Global. Please go ahead.

Hassan I. Ahmed: Good morning, John and Jeff.

Hassan I. Ahmed: Good morning, a quick quick question around the cost cuts global cost curves as you see them right now I mean look as I sort of sit there and think about the EBITDA margins that you guys just reported in Q4 call it 13 and change percent.

John D. Romano: We continue to get slag in lieu of, and that slag is actually going towards the payment of the debt. And there's not much change in our agreement with them at this particular stage. So, still continuing to work with them, and the slag that we're getting is largely going towards paying down debt. Okay, thank you. Your next question comes from Hassan Ahmed with Alembic Global. Go ahead. Morning, John and Jeff.

Hassan I. Ahmed: Obviously down from Q4 of 'twenty two levels of north of 17%.

17% plus in Q3.

John D. Romano: You know, quick question around the cost curves, global cost curves as you see them right now. I mean, look, as I sort of sit here and think about the EBITDA margins that you guys just reported in Q4, call it 13 and change percent, obviously down from Q4 of 22 levels of north of 17 percent, you know, 17 percent plus in Q3. I mean, I'd like to think that you guys, being as integrated as you are, obviously, and you talk about this as well, enjoy sort of a margin premium relative to your competitors globally So I'd like to think that, you know, there's a large chunk of the industry that is at break even or maybe even negative EBITDA margins, right?

Hassan I. Ahmed: Like to thank you guys being as integrated as you are obviously and you talk about this as well enjoy sort of.

Hassan I. Ahmed: Margin premium relative to your competitors globally. So I'd like to think that there is a large chunk of the industry that is at breakeven to maybe even negative EBITDA margins right and then I sort of sit there and think about the guidance that you've given for 2024.

Hassan I. Ahmed: Mid teens EBITDA margins I mean does that get if the industry moves in that direction.

Hassan I. Ahmed: Are you sort of guiding to the industry beginning to make sort of positive EBITDA margins.

I'm just trying to get a sense of where the industry is are these sort of breakeven to negative margin sustainable for the industry and maybe potentially are you being conservative and giving the margin guidance that you guys have given.

John D. Romano: And then I sort of sit there and think about the guidance that you've given for 2024 of mid-teens EBITDA margins. I mean, does that get, if the industry moves in that direction? I mean, are you sort of guiding to the industry beginning to make sort of positive EBITDA margins? I mean, I'm just trying to get a sense of where the industry is, are these sort of break-even to negative margins sustainable for the industry, and maybe potentially, are you being conservative in giving the margin guidance that you guys have given? Hey, thanks, Saad.

Hey, Thanks, So I look at the guidance that we gave for mid teens was for Q1.

Speaker Change: And I.

Speaker Change: I think we got a question a bit earlier about where do we see the business moving.

Speaker Change: A lot of that margin.

Speaker Change: Let's just say price doesn't move what we've said we expect it to but if price didn't move our margin is going to improve as our capacity increases and by mid year, we would expect that our EBIT.

John D. Romano: Look, the guidance that we gave for mid teens was for Q1. And, you know, I think we got a question a bit earlier about, you know, where do we see the business moving? A lot of that margin, Let's just say price doesn't move, which we've said we expect it to. But if price didn't... Our margin is going to improve as our capacity increases. And by mid-year, we would expect that our EBITDA margins will be back in the 20s. We ran 18 months, 18 quarters in the mid to high 20s.

Speaker Change: EBITDA margins will be back in the twenties, we ran 18 months 18 quarters.

Speaker Change: The mid to high Twenty's, So just put pricing aside running our assets because of our vertical integration is actually going to do just exactly what you said, it's going to get us to norm normalized EBITDA margins on our competitors and I'm not going to speak to them, but they are publicly their information is publicly available I wouldn't disagree with the car.

Speaker Change: <unk> you made I I do believe that the Chinese are in that similar boat.

John D. Romano: So just put pricing aside, running our assets, because of our vertical integration, is actually going to do just exactly what you said. It's going to get us to normalize EBITDA margins. On our competitors, I'm not gonna speak to them, but their information's publicly available. I wouldn't disagree with the comments you made.

Speaker Change: With not making significant.

Speaker Change: EBITDA margin anywhere we believe the majority of them are losing money so.

Speaker Change: We believe our margins are going to improve in 'twenty four is going to be a much better year.

Speaker Change: And ultimately where we are as an industry is not a sustainable place to be negative EBITDA margins don't.

John D. Romano: I do believe that the Chinese are in that similar boat with not making a significant EBITDA margin anywhere. We believe the majority of them are losing money. So we believe our margins are going to improve, and 24 is going to be a much better year. And ultimately, where we are as an industry is not a sustainable place to be. Negative EBITDA margins; you can't do that for very long because people don't have balance sheets to support it.

Speaker Change: You can't do that for very long because people don't have balance sheets to support that.

Speaker Change: Fair enough and as a follow up if I could revisit the whole.

Speaker Change: European Commission anti dumping side of things.

Speaker Change: I mean is it fair to assume.

Speaker Change: Whatever direction. The final ruling takes I mean is it fair to assume that it's almost like 200 to 250000.

John D. Romano: Fair enough. And as a follow-up, if I could revisit the whole sort of European Commission anti-dumping side of things, I mean, is it fair to assume, you know, whatever direction the final ruling takes, that there are almost 200 to 250,000 tons of sort of material that is up for grabs and that could potentially entirely go towards Western producers? Yeah, look, I guess what's up for grabs is a, It's a way to look at it, but...

Speaker Change: All sort of.

Speaker Change: Material that is up for grabs.

Speaker Change: That could potentially entirely go towards the western producers.

Speaker Change: Yes.

Speaker Change: I guess up for grabs.

Speaker Change: It's a way to look at it but.

Speaker Change: If I'm a Chinese producer I mean, the other option would be for them to raise their price.

John D. Romano: If I'm a Chinese producer, the other option would be for them to raise their prices. But once a duty is in place, I think that that is going to drive some different behavior, for sure. And it's early days.

Speaker Change: But once the duty is in place I think that that is going to drive some different behavior for sure and.

Speaker Change: It's early days like I said, the formal investigation won't end until the first quarter or into the first quarter and then it will typically be the end of the year before the process is complete provisional duties could come sooner than that.

John D. Romano: Like I said, the formal investigation won't end until the first quarter or end of the first quarter. And then it'll typically be the end of the year before the process is complete, although provisional duties could come sooner than that.

John D. Romano: So, you know, we're just kind of, Again, this was something that was led by a coalition of suppliers, so it's not like we have exact data on what's happening, but we do have a pretty good idea of where we are in the process. It's just a bit early to determine what that duty will be and if it's going to get implemented, but if it were to, yes, I would definitely think that there's going to be some volume shift and some pricing opportunities. Perfect. Thank you so much. Your next question comes from Vincent Andrews with Morgan Stanley. Please go ahead. Vincent Andrews, your line is open.

Speaker Change: So we're just kind of.

Speaker Change: Again this was something that was led by a coalition of suppliers. So we don't it's not like we have.

Speaker Change: Data on what's happening, but we do have a pretty good we alone are a pretty good idea of where we are in the process.

Speaker Change: It's just a bit early to determine.

Speaker Change: Got that duty is and if it's going to get implemented but if it were to yes, I would definitely think that theres going to be some volume shift.

Speaker Change: And some pricing opportunity.

Speaker Change: Perfect. Thank you so much.

Speaker Change: Your next question comes from Vincent Andrews with Morgan Stanley. Please go ahead.

Speaker Change: Vincent Andrews your line is open.

Vincent Andrews: Your next question comes from Roger Spitz with Bank of America. Please go ahead.

Operator: Your next question comes from Roger Spitz with Bank of America. Please go ahead. Thank you and good morning. The first one is for 2024. In addition to EBITDA, CapEx, what have you, that you've identified, what I refer to as other free cash flow items, you identified a potential $15 million insurance recovery. Are there any other so-called other cash flow items for 2024 that we should think about, whether restructuring or other other items in your operating cash flow? No, Roger, we don't have anything forecast that is expected at this point other than the insurance recovery that you mentioned. I got it.

Roger Spitz: Thank you and good morning, two questions.

Roger Spitz: The first one is for 2024 in addition to EBITDA Capex, what have you and you've identified.

Roger Spitz: Again, aside when I referred to as other free cash flow items, you identified potential $15 million insurance recovery.

Roger Spitz: Are there any other so called other cash flow items for 2024 that we should think about whether restructuring or other other items in your operating cash flow.

Speaker Change: No Roger we don't have anything forecasted are expected at this point other than the insurance recovery that you mentioned.

Speaker Change: Got it and then second is.

John D. Romano: And then secondly, I know it's early days, but just want to fill stuff in on the model. For 2025, how should we think about CapEx with relation to 2024? Same level or different?

I know, it's early days, but just wanted to fill Stefan in my model for 2025, how should we think about capex with relation to 2020 for same level or different and perhaps.

John D. Romano: And perhaps the cash tax rate in 2024. You talked about South African mining operations. Does that repeat in 2025? Or is that more back to a normal cash tax rate?

Speaker Change: Perhaps the cash tax rate in 'twenty 'twenty, four and you talked about South African mining operations.

Does that repeat in 2025 or is that more back to a normal cash tax rate.

John D. Romano: Yeah, so look, we don't have a complete forecast for 2025 capital yet, but it'll probably be slightly lower than what we have. We've still got some other mining projects going on. And John, you can comment on the tax, but to the extent that we're still spending money in South Africa, you know, that would be deductible. So it's a little early to come up with what our tax is going to be. Yeah, I agree with that, John.

Speaker Change: Yes. So look we don't have a complete forecast for 2025 capital yet, but it will probably be slightly lower than what we have we still got some other mine mining projects going on and John you can comment on the tax but to the extent, we're still spending money in South Africa that would be deductible. So it's a little early to come up with what our tax.

John: Yeah, it's going to be.

John D. Romano: And, you know, we will be spending, this is not a one-year investment in South Africa; it's a multi-year investment. So those expenses that we would spend on capital in South Africa would be deductible in 2025. Thank you very much.

Speaker Change: I agree with that John and we will be spending is this is not a one year.

John: Investment in South Africa, it's multiyear so those expenses that we would spend on capital in South Africa would be deductible in 'twenty five.

John: Okay.

Speaker Change: Thank you very much.

John D. Romano: Your next question comes from John McNulty with BMO Capital Mark. Yeah, hi guys. Sorry, just one follow-up. So, when I look at your inventory and the hit that it's had on working capital over the last couple of years, it's about $400 million in the last two years. If you return to kind of more normal operating rates at the middle of this year, I guess, how long realistically will it take to reverse that inventory drag where you see a source of funds from inventory? Can you clean all that up in whatever, two to three years?

Speaker Change: Your next question comes from John Mcnulty with BMO capital markets.

Please go ahead, yes, hi, guys, sorry, just one follow up so when I look at your inventory.

John P. McNulty: Hit that it's had on working capital over the last couple of years, it's about $400 million in the last two years. If you return to kind of more normal operating rates at the middle of this year I guess, how long realistically, we will achieve two to reverse that that inventory drag where you see a source of funds from inventory.

Speaker Change: Sorry can you clean all of that up in whatever two to three years is it is it hey look this could take a very long time, I guess I'm just not sure with the mining side, how to think about how this all could work through and how quickly you could recapture some of that lost inventory.

John D. Romano: Is it, hey, look, this could take a very long time? I guess I'm just not sure on the mining side how to think about how this all could work out and how quickly you could recapture some of that lost inventory. Yeah, John, it's a good point.

Speaker Change: Yes.

Speaker Change: John.

John: Good point as we mentioned we have a long supply chain. So while in the past 18 months or so we did slow down our pigment sites and brought down that inventory we were running.

John D. Romano: As we mentioned, we have a long supply chain. So while in the past 18 months or so, we did slow down our pigment sites and brought down that inventory, we were running our mines relatively flat out. So build some feedback inventory.

Speaker Change: Our minds relatively flat out so build some feedstock inventory if you take a look at 2024, we do see that reversing.

John D. Romano: If you take a look at 2024, we actually do see that reverse inventory, but we do expect that's a bigger swing historically on what was driving the negative working capital change. And as we've guided, we do expect working capital to be positive. And a lot of that is owing to inventory, cashing in on that. But I guess I guess, can you get the full 400 million back? Or is there some reason why that won't be the case? And I don't mean in 24 hours? I just mean, is there?

Inventory, we do expect that.

Speaker Change: Bigger swing historically on what was driving the negative working capital change and as you as we've guided we do expect working capital to be positive and a lot of that is owing to.

Speaker Change: Two inventory.

Speaker Change: Cashing out on that.

Speaker Change: Well I.

I guess can you get the full 400 million back or is there. Some reason why why that wont be the case and I don't mean in 'twenty four.

John D. Romano: Are we at kind of a new level for one reason or another? Or should you be able to reverse that $400 million inventory headwind from the last two years? Yeah, we would expect that we would recover that over time. Thank you very much for the call.

Speaker Change: There are.

Speaker Change: Are we at kind of a new level for one reason or another or should you be able to reverse that $400 million inventory headwind from the last two years.

Speaker Change: Yes, we would expect that we would recover that overtime.

Not in 'twenty for very much for the call.

Speaker Change: Recovery.

Speaker Change: Got it thanks very much for the color.

John D. Romano: Thanks very much for the call. Thank you. Your next question comes from Vincent Andrews with Morgan Stanley. Please go ahead. Hi, thank you. This is Turner Henrickson for VINCE.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Vincent Andrews with Morgan Stanley. Please go ahead.

Speaker Change: Hi. Thank you. This is Turner henricks on for Vincent in your slides you mentioned that February and March order books are tracking above strong January sales do you mind touching on what end markets or channels are driving the strength in any movements in inventory levels that youre seeing.

John D. Romano: In your slides, you mentioned that the February and March order books are tracking above strong January sales. Do you mind touching on what end markets or channels are driving the strength and any movements in inventory levels that you're seeing? Yeah, look, so those, it's, it's basically across the entire market.

Speaker Change: Yes look so those are it's.

Speaker Change: It's basically across the entire market. So every region, we're seeing additional volumes.

John D. Romano: So every region, we're seeing additional volumes. I mentioned that we're seeing, again, North America didn't drop as much as the other regions, and it's, I'd say, a little bit slower to pick back up.

Turner Henricks: I mentioned that we're seeing again North America didn't drop as much as I think the other regions.

Turner Henricks: And it's I'd say, a little bit slower to picking back up we referenced in the fourth quarter, we saw a little bit more seasonality, but what we're also seeing North America pick up a little bit stronger in the first quarter. So I'd say, it's across the board.

John D. Romano: As we mentioned in the fourth quarter, we saw a little bit more seasonality, but we're also seeing North America pick up a little bit stronger in the first quarter. So I'd say it's across the board, and it's not specific to any particular end segment. So it's Coatings, Plastics, Paper, and Special.

Turner Henricks: It's not specific to any particular in segments. So it's okay.

Turner Henricks: It's coatings plastics paper and specialty.

John D. Romano: Great, makes sense. Do you mind providing some additional color on what you're seeing for important export trends? And if you have any details as it relates to freight costs, if they're affecting those trends, or the underlying macro across the regions, that would also be helpful. Any specific region you're referring to; imports and exports are just generic.

Speaker Change: Great makes sense do you mind, providing some additional color on what youre seeing for important export trends and if you have any details as it relates to freight costs. If they are affecting those trends or the underlying macro across the regions that would also be great.

Speaker Change: Any specific reason you're referring to on.

Speaker Change: Imports or exports or just generically.

John D. Romano: Generally, it would be interesting to hear about Chinese exports or European imports broadly, both given, you know, Chinese export trends and the anti dumping probe that would also be of interest. Yeah, so in China, over the last couple of months, we don't actually have January numbers yet. But I'd say November, December, we've continued to see an uptick, which was not, I'd say, surprising, considering there was an anti So we've seen some additional exports coming out of China, and Europe is obviously a big market for bringing in material from China.

Speaker Change: Generally it would be interesting to hear about Chinese exports or European imports broadly both given.

Speaker Change: Chinese export trends and the antidumping probe that would also be of interest.

Speaker Change: Yes, so in China.

Speaker Change: Over the last couple of months, we don't have actually January numbers, yet but.

Speaker Change: I'd say November and December we've continued to see an uptick which was not I'd say surprising considering there was.

Speaker Change: An anti dumping suit filed.

Speaker Change: So we've seen some additional exports coming out of China at.

Speaker Change: Europe is obviously, a big market for bringing in material from China.

John D. Romano: We've, you know, as far as some of the activity going on in Europe and other areas, I referenced some issues with imports and exports due to the congestion in the Red Sea. So for producers that are in Europe, I think they're actually getting a little benefit, a little bit of benefit from that, depending upon where they're located and where they're shipping. But I wouldn't say there's been a significant change in

Speaker Change: As far as some of the activity going on in Europe, and other areas of I referenced some issues with imports and exports due to the congestion in the Red Sea.

Speaker Change: So for producers that are in Europe, I think they are actually getting a little benefit a little bit of benefit from that depending upon where they're located and where the shipping but I wouldn't say there is significant.

Speaker Change: Change in activity now on the freight we are seeing some positive moves on freight.

John D. Romano: Now on freight, we are seeing some positive moves on freight. What's happening in the Red Sea is, I'd say, a bit more of a short-term anomaly where we're seeing some spot rates that are higher than what we put in our forecast. But you know, historically, over the course of the last 24 months, freight rates have gone up significantly, and we're starting to see those abate. And that's, I'd say, a tailwind for us as we think about our 24-month forecast, although right now, some of those rates have been, I'd say, negatively impacted due to some of the activity that's happening in the Middle East. Great, thank you so much for the color.

Speaker Change: What's happening in the Red Sea is I'd say a bit more of a short term anomaly, where we're seeing some spot rates that are higher than what we put in our forecast, but historically, we over the course of the last 24 months freight rates have gone up significantly and we're starting to see those abate and that's I'd say a tailwind for us as we think about our 24 forecast although right now.

Speaker Change: Some of those rates have been.

Speaker Change: I'd say negatively impacted due to some of the activity that's happening in the middle East.

Speaker Change: Great. Thank you so much for the color.

John D. Romano: I will now turn the call over to John Romano, co-CEO. Thank you, operator. Look, we're very confident in where we are with our company moving into 2024, and our vertical integration strategy, we believe will continue to provide our competitive advantage. We remain optimistic about the short and long term for Tronox, and the value creation from a lot of the projects that we're doing, including sustainable mining and upgrading solutions. So I'd like to thank you all for your interest in Tronox and your support, and have a great day. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line. BF-WATCH TV 2021

Speaker Change: I will now turn the call over to John Romano Co CEO.

John D. Romano: Thank you operator look we're very confident in where we are with <unk>.

John D. Romano: Our company moving into 2024, and our vertical integration strategy. We believe will continue to provide our competitive advantage and we remain optimistic in the short the long term.

John D. Romano: For Tronox the value creation from.

John D. Romano: From a lot of the projects that we're doing including sustainable mining and upgrading solutions. So I'd like to thank you all for your interest in Tronox and your support and have a great day.

Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.

Speaker Change: [noise].

Speaker Change: Yes.