The Chemours Company (NYSE: NYSE:CC) held its Q3 2023 earnings call, revealing a weaker second half due to lower TT volumes but forecasting improvements in 2024. The company also announced its focus on a new product for data center cooling, expected to be commercialized in 2025, and highlighted the continued success of its TSS business.
Key takeaways from the call include:
- The company's TT Transformation Plan and APM business faced challenges, but the Performance Solutions segment reported double-digit growth.
- The TSS business achieved record net sales for the seventh consecutive quarter.
- The company anticipates increased adoption of HFOs in 2024 and significant growth in the immersion cooling market in 2025.
- A new product for data center cooling is currently in the registration process, with commercialization expected in 2025.
- The company is actively working on expansion plans, expecting growth to ramp up in early 2024.
- Executives highlighted cost savings of $100 million expected for next year, with $50 million attributed to the closure of the Kuan Yin facility.
Chemours reported a challenging second half of the year due to lower TT volumes and demand weakness in the APM business. However, the company has responded with reductions in the TT Transformation Plan, which it anticipates will show improvement in 2024. Despite these challenges, the Performance Solutions segment achieved double-digit growth, and the TSS business reported record net sales for the seventh consecutive quarter.
The company is also focusing on the development of a new product aimed at reducing water usage in cooling data centers. This product is currently undergoing the registration process and is expected to hit the market in 2025. Chemours sees significant growth potential in this market by 2030.
In terms of cost savings, the company targets $100 million on a run-rate basis for next year, with half of this amount coming from the closure of the Kuan Yin facility. Updates on additional run rate savings are expected in the coming quarters.
The company also acknowledged the destocking in the TiO2 market, which began in the third quarter of the previous year and has continued for about 12 months. While there are no signs of a market turn yet, except in Asia Pacific where inventory levels seem to be stabilizing, the company believes it is well positioned for a market turnaround with the actions it has taken.
The CEO emphasized the company's focus on driving long-term shareholder value and improvements in its businesses. The company is actively working on expansion plans and expects the growth to ramp up in early 2024. The executives concluded the call by expressing their commitment to driving value for shareholders.
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