TRONOX LIMITED CL A ORDINARY SHARES 2026 Q2 Earnings Call

Jennifer, please go ahead. Thank you, and welcome to our second quarter 2026 conference call and webcast.

Turning to slide two, on our call today are John Romano, Chief Executive Officer, and John Srivisal, 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. 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.

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 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? Thanks, Jennifer, and good morning, everyone.

We'll begin this morning on slide four. In the second quarter, we continued to build on the commercial momentum we saw in the first quarter. TiO2 volumes came in at the high end of our guidance and at the highest level since Q2 of 2022. Zircon volumes exceeded our expectations and surpassed the strong levels achieved in Q1 as supply remained constrained across the industry. This performance reflects disciplined commercial execution, strong customer engagement, and the value of our global footprint, which continues to allow us to reliably serve customers as supply dynamics shift across our markets. We also continue to see meaningful structural benefits from anti-dumping measures. In addition, customer shifts in certain markets, including India, where customers are increasingly prioritizing reliable supply and long-term supplier relationships, are driving strong volumes in the region.

As it relates to India, on August the third, the Indian Trade Defense Agency issued a recommendation that duties on Chinese-made TiO2 be reinstated. The level of the duties recommended is unchanged from the original duties imposed in May 2025. The recommendation now goes to the Minister of Finance, which has 90 days to approve. We believe this represents another important step towards reestablishing a more level and competitive environment. Given the long lead times associated with global shipments, the impact is unlikely to be immediate, but over time, we would expect these measures to impact Chinese exports into India and further support the structural changes already underway in the market.

We also remain encouraged by the progress of the anti-dumping investigations in Australia and the United Kingdom and will continue to evaluate additional appropriate actions, such as anti-absorption in markets where duties have already been imposed to support fair competition. Additionally, broader supply dynamics continue to evolve. Capacity curtailments, logistics challenges, and trade defense measures are impacting supply and trade flows across a number of regions. On pricing, the previously announced increase took effect as planned during the second quarter, driving sequential pricing improvement of 5% for both TiO2 and zircon. The improvement in Q2 was driven primarily by higher base pricing rather than temporary surcharge mechanisms. We also announced additional pricing actions for both products that have gone into effect in the third quarter.

While we continue to use targeted surcharges where appropriate, our focus has shifted towards more sustainable pricing actions that reflect the current market conditions, higher input costs, and the value of our reliable supply. We'll discuss our outlook in more detail later in the call, the continued realization of these pricing actions remains an important driver of our expected margin improvement in the third quarter. From a cost perspective, we continue to realize the benefits from our cost improvement program, which remains on track to deliver at the higher end of our $125 million-$175 million run rate target at the end of 2026. These efforts contributed to sales of lower cost inventory during the quarter and helped offset a number of headwinds. As expected, our second quarter cost profile reflected the impact of the planned outages.

We successfully completed both the regulatory outage in Stallingborough and our extended SR kiln outage. These were significant planned events for the year, and I want to recognize our teams for executing both safely and efficiently. Importantly, those outages are now behind us and position us for improved operating performance moving forward. While we see elevated cost stemming from the conflict in the Middle East and unfavorable foreign exchange movement, we delivered adjusted EBITDA within our expected range for the quarter. We also made strong progress on cash generation and working capital. Free cash flow was a positive in the second quarter, and we reduced inventory by approximately $120 million from the first quarter level, bringing inventory to its lowest level since June 2024. We remain focused on strengthening liquidity, improving working capital efficiency, and continuing to optimize our capital structure to enhance financial flexibility.

At the same time, we're making targeted operational decisions to support demand and product availability. This includes the restart of a furnace and advancing plans to bring production back online at our west mine, both at Namakwa, to support inventory levels, including zircon to meet demand as we continue to ramp up East OFS to full production. While the situation in the Middle East remains dynamic, our approach remains focused on factors we can control and influence. We are actively evaluating market conditions, customer demand, supply chain impacts, and input costs, and taking targeted commercial and operational actions where appropriate. As conditions evolve, we'll remain disciplined and adaptable, focused on maintaining reliable supply to our customers while protecting earnings and cash flow. I'll speak to our expectations for the third quarter and the full year in more detail later in the call.

For now, I'll turn the call over to John to review our financials from the second quarter in more detail.

John? Thank you, John. Turning to slide five.

We generated revenue of $868 million, an increase of 19% versus the second quarter of 2025, driven by higher TiO2 and zircon volumes, partly offset by lower average selling prices of zircon, including mix. Loss from operations was $21 million. Net loss attributable to Tronox was $171 million, including a $103 million valuation allowance on certain state-deferred tax assets in the U.S. Adjusted diluted earnings per share was a loss of $0.51. Adjusted EBITDA was $73 million, and our adjusted EBITDA margin was 8.4%. Capital expenditures were $45 million, and free cash flow was a source of $60 million for the quarter. Let's move to the next slide for a review of our commercial performance. As John mentioned, TiO2 volumes came in at the high end of our range, and zircon came in better than expected.