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Tronox Holdings plc (TROX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue declined to $699M (−13% y/y, −4% q/q) with adjusted EBITDA of $74M (10.6% margin) and adjusted diluted EPS of −$0.46, reflecting weaker demand, destocking, and pricing pressure across TiO2 and zircon .
  • Missed S&P Global consensus on revenue ($699M vs $758.7M*) and adjusted EPS (−$0.46 vs −$0.21*), driven by softer pricing/mix and lower volumes; free cash flow was a use of $137M despite $80M capex .
  • Management guides Q4 revenue and adjusted EBITDA “relatively flat” to Q3, with TiO2 volumes +3–5% and zircon volumes +15–20% q/q, partially offset by ~2% and ~6% price headwinds; expects positive FCF in Q4 and 2026 .
  • Cash preservation actions: idled Fuzhou pigment plant, lowered rates/advanced maintenance at Stallingborough, idled one Namakwa furnace, and planning a temporary shutdown of the West mine; Q4 EBITDA headwind ~$11M but anticipated Q4 cash benefit ~$25–30M .
  • Strategic backdrop: finalized anti-dumping duties in Brazil and Saudi Arabia and expected reinstatement in India support share gains; >1.1M tons of global TiO2 capacity has been taken offline since 2023, aiding medium-term rebalance .

Estimates marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Trade defense tailwinds: “Brazil finalized its duties… significantly [higher] for major Chinese importers,” Saudi Arabia implemented definitive duties, and India duties are expected to be reinstated .
    • Cost program ahead of schedule: on track for >$60M annualized savings by YE25; target $125–$175M by YE26; Q4 cash benefit of ~$25–30M from targeted operational actions .
    • Liquidity strengthened: issued $400M senior secured notes; quarter-end liquidity $664M (cash $185M, $479M undrawn revolvers); next significant maturity 2029 .

  • What Went Wrong

    • Demand/pricing: TiO2 revenue −11% y/y on −8% volumes and −5% ASP; zircon −20% y/y on −4% volumes and −16% ASP (mix); sequential TiO2 −6% and zircon −13% .
    • Competitive pressure: liquidation by a competitor at below-market prices and a temporary stay of India anti-dumping duties weighed on pricing and volumes .
    • Cash flow: free cash flow was a use of $137M in Q3, with capex of $80M and working capital not providing the expected relief due to weaker volumes and timing .

Financial Results

Headline metrics versus prior year/quarters (older → newer)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($M)$804 $738 $731 $699
Adjusted EBITDA ($M)$143 $112 $93 $74
Adjusted EBITDA Margin (%)17.8% 15.2% 12.7% 10.6%
GAAP Diluted EPS−$0.16 −$0.70 −$0.53 −$0.63
Adjusted Diluted EPS−$0.13 −$0.15 −$0.28 −$0.46
Free Cash Flow ($M)−$14 −$142 −$55 −$137

Segment/product revenue ($M) (older → newer)

SegmentQ3 2024Q1 2025Q2 2025Q3 2025
TiO2$616 $584 $587 $550
Zircon$74 $69 $68 $59
Other products$114 $85 $76 $90

KPI snapshot

KPIQ3 2025
SG&A expense ($M)$70
D, D&A ($M)$75
Net interest expense ($M)$47
Capex ($M)$80
Liquidity ($M)$664 (Cash $185; RCF $479)
Total Debt / Net Debt ($B)$3.2 / $3.0
Net leverage (TTM)7.5x

Versus S&P Global consensus (Q3 2025)

MetricConsensus*ActualSurprise
Revenue ($M)$758.7*$699 −7.9%
Adjusted EPS−$0.21*−$0.46 −$0.25

Estimates marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$3.0–$3.1B (Q2 guide) Not reiterated in Q3; company guided Q4 “relatively flat” to Q3 Shifted to near-term view; implicit downward bias vs prior FY guide
Adjusted EBITDAFY 2025$410–$460M (Q2 guide) Not reiterated; Q4 “relatively flat” to Q3 Shifted to near-term view
Free Cash FlowFY 2025Use of $100–$170M (Q2) Q4 positive; 2026 positive Near-term improved; full-year not updated
TiO2 volumesQ4 2025n/a+3–5% q/q (net of ~2% headwind from Fuzhou idle) New detail
Zircon volumesQ4 2025n/a+15–20% q/q New detail
Pricing assumptionQ4 2025n/aTiO2 ~−2%, zircon ~−6% q/q New headwind
EBITDA headwind from idlingsQ4 2025n/a~−$11M included New detail
CapexFY 2025< $330M (Q2) ≈ $330M reiterated Maintained
CapexFY 2026n/a< $275M New
DividendQ3/Q4 2025Reduced to $0.05/sh (Q2) Q4 dividend at $0.05 reiterated Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Anti-dumping/tariffsQ1: EU duties aided demand; pushing for India/Brazil/Saudi measures . Q2: Brazil investigation delays; early India momentum .Brazil finalized higher duties; Saudi duties implemented; India stay viewed as procedural with expected reinstatement .Strengthening trade defense; supportive for share gains.
Demand/destockingQ1: Seasonally strong TiO2 volumes; pricing pressure persists . Q2: Softer coatings season; macro pressures .Weaker-than-forecast demand; destocking concentrated late Q3; October sales among year’s highest; Q4 volumes guided up q/q .Weak-to-improving sequential trajectory into Q4.
Competitive dynamicsQ1–Q2: Heightened competition .Competitor insolvency drove below-market liquidation; broader pricing pressure .Near-term headwind, expected to fade.
Cost programQ1: Target $125–$175M run-rate by YE26 . Q2: Ahead of plan .>$60M run-rate by YE25; 2,000+ ideas; fixed cost reductions, yields, digital tools enabling progress .Execution momentum improving.
Operations/productionQ1: Botlek idling to cut costs .Idled Fuzhou; lowered Stallingborough rates; idled one Namakwa furnace; temporary West mine shutdown post East OFS commissioning .Proactive capacity discipline to align inventory/cash.
Liquidity/leverageQ1: Net leverage 5.2x; liquidity $443M . Q2: Net leverage 6.1x; liquidity $397M .Net leverage 7.5x; liquidity $664M post $400M notes and $50M inventory financing; no near-term maturities .Liquidity bolstered; leverage elevated in downturn.
Rare earthsLimited in Q1/Q2 disclosures.5% equity in Lion Rock Minerals; DFS underway for cracking/leaching; partnering contemplated for downstream separation .Strategy advancing with optionality.

Management Commentary

  • “Our third quarter results were shaped by… weaker demand than forecasted, downstream destocking… and heightened competitive dynamics… [including] more aggressive liquidation of inventory at below-market pricing.”
  • “We are on track to deliver in excess of $60 million in annualized savings by the end of 2025 and expect to reach our $125–$175 million annualized savings goal by the end of 2026.”
  • “We expect fourth quarter TiO2 volumes to increase 3–5%… and zircon volumes to increase 15–20%… strong leading indicators… on the front end of a recovery.”
  • “Brazil finalized its duties… Saudi Arabia has now implemented definitive anti-dumping duties… we expect India’s duties to be reinstated.”
  • Rare earths: “We’ve completed a pre-feasibility study and started a definitive feasibility study on cracking and leaching in Australia; refining/separation likely with a partner.”

Q&A Highlights

  • India duties: Management views the stay as procedural and expects reinstatement; India remains a key market with a 10% FTA advantage on Australian supply even without duties .
  • Pricing outlook: TiO2 pricing pressure linked to competitor liquidation; if demand patterns hold, pricing initiatives could follow, earliest after Q1 seasonality .
  • Operational idling cadence: Fuzhou idled to preserve cash; Stallingborough slowed for maintenance/inventory alignment and likely back to full rates in Q4; West mine idling tied to East OFS commissioning .
  • Cash/FCF bridge: Q4 aided by rolled zircon shipment, tailings cash collections, lower restructuring payments; targeted actions yield $25–30M Q4 cash benefit; 2026 FCF positive with lower capex (<$275M) and lower restructuring cash .
  • Covenants/liquidity: Undrawn U.S. revolver; ample cushion to springing covenant threshold; liquidity $664M at quarter-end .

Estimates Context

  • Revenue and EPS missed S&P Global consensus: $699M actual vs $758.7M* revenue; −$0.46 adjusted EPS vs −$0.21* .
  • Q4 2025 consensus embeds softer revenue and EPS: $687.4M* revenue; −$0.25* EPS; management’s qualitative Q4 guide (“relatively flat” to Q3) is broadly consistent with near-term market caution .

Estimates marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Expect a seasonally atypical Q4 with volumes up but pricing down; management targets positive Q4 FCF via production curtailments, inventory monetization, and lower restructuring cash outflows .
  • The revenue/EPS miss was driven by price/mix and volume pressure amid competitor liquidation and India duty delay; management indicates liquidation impact should fade by year-end and India duties likely to return .
  • Structural setup is improving: finalized duties in Brazil/Saudi and expected India reinstatement plus >1.1M tons of supply taken offline since 2023 support a more favorable 2026 supply/demand balance .
  • Execution focus: cost program tracking >$60M run-rate by YE25 toward $125–$175M by YE26, with demonstrated resilience in fixed-cost absorption despite lower utilization .
  • Liquidity is adequate post-$400M notes; leverage is elevated (7.5x TTM) but maturities are long-dated (2029), reducing refinancing risk in the near term .
  • Watch catalysts: India duty decision timing, evidence of competitor liquidation abating, Q4 volume realization vs guide, and 2026 capex normalization (<$275M) .
  • Medium-term thesis: Trade defense plus capacity rationalization and vertical integration position Tronox to benefit disproportionately in a recovery, with potential upside from rare earth optionality .