Tronox Holdings PLC (TROX) 2025 Q2 法說會逐字稿

Good morning and welcome to the Tronox Holding PLC Q2 2025 earnings conference call. (Operator Instructions) This call is being recorded. If you have any objections, please disconnect at this time.

早安，歡迎參加 Tronox Holding PLC 2025 年第二季財報電話會議。（操作員指示）此通話正在錄音。如果您有任何異議，請立即斷開連接。

I would now like to turn the call over to our host, Jennifer Guenther, Chief Sustainability Officer, Head of Investor Relations and External Affairs. Please go ahead.

現在，我想將電話轉給我們的主持人、首席永續發展長、投資者關係和外部事務主管 Jennifer Guenther。請繼續。

Thank you and welcome to our second quarter 2025 conference call and webcast.

謝謝您，歡迎參加我們的 2025 年第二季電話會議和網路廣播。

Turning to slide 2 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.

今天電話會議翻到投影片 2 的是執行長 John Romano 和資深副總裁兼財務長 John Srivisal。在今天的電話會議中，我們將使用幻燈片。您可以在我們的網站 investor.tronox.com 上存取該簡報。

Moving to slide 3, a friendly reminder that comments made on this call and the information provided in our presentation and on our website includes 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.

前往投影片 3，友情提醒，本次電話會議中的評論以及我們在簡報和網站上提供的資訊包括某些前瞻性的陳述，這些陳述受各種風險和不確定性的影響，包括但不限於我們向美國證券交易委員會提交的文件中總結的具體因素。這些資訊代表了我們根據目前所知所做的最佳判斷。

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-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.

然而，實際結果可能因這些風險和不確定性而有所不同。本公司不承擔更新或修改任何前瞻性陳述的義務。在電話會議中，我們將參考我們在業務管理中使用的某些非美國公認會計準則財務術語，並相信這些術語對投資者評估公司績效有用。

Reconciliations to their nearest US 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.

我們的收益報告和隨附簡報的附錄中提供了與最接近的美國 GAAP 條款的對帳。此外，請注意，除非另有說明，通話期間進行的所有財務比較都是按同比進行的。

It is now my pleasure to turn the call over to John Romano. John?

現在我很高興將電話轉給約翰羅馬諾。約翰？

Thanks, Jennifer, and good morning, everyone. We'll begin this morning on slide 4 with some key messages from the quarter.

謝謝，詹妮弗，大家早安。今天上午，我們將從投影片 4 開始介紹本季的一些關鍵資訊。

Our second quarter was impacted by weaker demand across most of our end markets, and this resulted in softer than anticipated coding seasons and highlighted competitive heightened competitive dynamics across our key end markets. Volumes in Q2 were 2% lower sequentially and 11% lower year-over-year, reflecting weaker than usual seasonality.

我們的第二季受到大多數終端市場需求疲軟的影響，這導致編碼季節比預期的要疲軟，並凸顯了我們主要終端市場的競爭加劇。第二季的銷售量較上季下降 2%，年減 11%，反映出季節性因素比平常弱。

Broader macroeconomic pressures included elevated interest rates and tariff-related uncertainties continue to weigh on customer discretionary spending while home sales and construction activity remain subdued. Additionally, delays in Brazil's anti-dumping investigation enabled Chinese producers to exploit the GAAP between the expiration of provisional duties in April and final duties which we still anticipate by the beginning of Q4.

更廣泛的宏觀經濟壓力包括利率上升和與關稅相關的不確定性，繼續對消費者的可自由支配支出造成壓力，而房屋銷售和建築活動仍然低迷。此外，巴西反傾銷調查的延遲使得中國生產商能夠在 4 月臨時關稅到期和最終關稅（我們預計最終關稅將在第四季初生效）之間利用 GAAP。

We are encouraged by our early sales momentum in India following the implementation of duties in May. Our advantaged position in India through the Australia India Free Trade Agreement, coupled with the duties against Chinese imports presents a significant opportunity for sales line growth in a fast growing economy or per capita TiO2 consumption.

自從五月關稅實施以來，我們在印度的早期銷售動能令我們感到鼓舞。我們透過澳洲印度自由貿易協定在印度佔據了優勢地位，再加上針對中國進口產品的關稅，為快速成長的經濟或人均 TiO2 消費量的銷售線成長提供了重大機會。

In response to the prolonged weakness in the market, we are executing a disciplined strategy to manage the downturn and optimize earnings in cash. Operationally, our costs were in line with expectations. The cost improvement program is progressing ahead of plan and it is proving essential in mitigating both raw material and operational pressures.

為了應對市場長期疲軟，我們正在執行嚴格的策略來應對經濟衰退並優化現金收益。從營運角度來看，我們的成本符合預期。成本改進計劃的進展比計劃提前，並且對於緩解原材料和營運壓力至關重要。

We remain confident in our ability to deliver $125 million to $175 million in sustainable run rate savings by the end of 2026. The idling of our bottle facility was not a decision we took lightly, but it was the right decision and our costs have improved as a result. Beyond these measures, we are continuing to evaluate all available levers, strengthen our operational foundation, ultra liquidity, and reinforce our role as a strategic global supplier to our customers.

我們仍然有信心，到 2026 年底，我們能夠實現 1.25 億至 1.75 億美元的可持續運行率節約。暫停我們的瓶裝設施並不是我們輕易做出的決定，但這是正確的決定，我們的成本也因此得到改善。除了這些措施之外，我們還將繼續評估所有可用的槓桿，加強我們的營運基礎、超級流動性，並鞏固我們作為客戶策略全球供應商的角色。

This includes intensifying our focus on commercial strategy, further reducing capital expenditures, and adjusting the dividend to ensure sustained financial strength and long-term shareholder value. I'll speak to these actions in more detail a little bit later in the call, but for now I'll turn the call over to John to review our financials from the quarter in more detail, John?

這包括加強對商業策略的關注，進一步減少資本支出，並調整股利以確保持續的財務實力和長期股東價值。我稍後會在電話中更詳細地討論這些行動，但現在我將把電話交給約翰，讓他更詳細地回顧一下我們本季的財務狀況，約翰？

Thank you, John. Turning to slide 5, we generated revenue of $731 million, a decrease of 11% versus the prior year second quarter, driven by lower sales volumes and unfavorable zircon pricing. Loss from operations with $35 million in the quarter and we reported a net loss of $84 million, including $39 million of restructuring and other charges that were primarily related to the idling of Botlek.

謝謝你，約翰。轉到幻燈片 5，我們的收入為 7.31 億美元，比去年同期第二季下降了 11%，因為銷售量下降和鋯石價格不利。本季營業虧損 3,500 萬美元，我們報告淨虧損 8,400 萬美元，其中包括 3,900 萬美元的重組費用和其他費用，主要與 Botlek 停產有關。

While our loss before tax was $81 million, our tax expense was $4 million in the quarter. We do not realize the tax benefits in jurisdictions where we are incurring losses. Adjusted diluted earnings per share was a loss of $0.28. Adjusted EBITDA in the quarter was $93 million and our adjusted EBITDA margin was 12.7%. Free cash show was a use of $55 million, including $83 million of capital expenditures.

雖然我們的稅前虧損為 8,100 萬美元，但本季我們的稅金支出為 400 萬美元。我們沒有在遭受損失的司法管轄區實現稅收優惠。調整後每股攤薄收益為虧損0.28美元。本季調整後EBITDA為9,300萬美元，調整後EBITDA利潤率為12.7%。自由現金顯示用途為 5500 萬美元，其中包括 8300 萬美元的資本支出。

Now let's move to the next slide for review of our commercial performance. As John covered earlier in the second quarter, we saw a challenge demand environment, including heightened competition, putting pressure on TiO2 and Zircon sales. TiO2 revenues decreased 10% versus the year ago quarter, driven by 11% decrease in sales volume, partially offset by a 1% favorable exchange rate impact. The price mix was flat in the quarter.

現在讓我們進入下一張投影片來回顧我們的商業表現。正如約翰在第二季早些時候提到的那樣，我們看到了充滿挑戰的需求環境，包括競爭加劇，這給二氧化鈦和鋯石的銷售帶來了壓力。TiO2 收入與去年同期相比下降了 10%，因為銷售量下降了 11%，但 1% 的有利匯率影響部分抵消了這一影響。本季價格組合持平。

Sequentially, TiO2 revenues increased 1%, driven by a 1% increase in average selling prices, including mix and a 2% favorable FX impact from the EUR. This is partially offset by volume declines of 2%. Zircon revenues decreased 20% compared to the prior, driven by a 10% decrease in both sales volumes and price including mix, driven by continued weakness primarily in China.

與上一季相比，TiO2 收入成長了 1%，這得益於平均銷售價格上漲 1%（包括混合價格）以及歐元帶來的 2% 的有利外匯影響。但銷量下降 2% 卻部分抵銷了這一影響。鋯石收入較去年同期下降了 20%，原因是銷售量和價格（包括混合價格）都下降了 10%，主要原因是中國經濟持續疲軟。

Sequentially, Zircon revenues decrease 1%, driven by a 2% decrease in price, including mix, partially offset by a 1% increase in volumes. Revenue from other products decreased 7% compared to the prior year and 11% versus the prior quarter, primarily due to lower sales volumes of pig iron.

鋯石收入環比下降 1%，原因是包括混合物在內的價格下降了 2%，但銷量增加了 1%，部分抵消了這一影響。其他產品收入較上年同期下降 7%，較上一季下降 11%，主要原因是生鐵銷量下降。

Turn to the next slide and we'll now review our operating performance for the quarter. Our adjusted EBITDA of $93 million represents a 42% year-on-year driven by higher production costs, unfavorable commercial impacts, and higher freight costs. So it is partially offset by exchange rate tailwinds and SG&A savings.

翻到下一張投影片，我們現在來回顧本季的營運表現。我們的調整後 EBITDA 為 9,300 萬美元，年增 42%，原因是生產成本上升、不利的商業影響以及運費上升。因此，匯率順風和銷售、一般及行政費用節省部分抵銷了這項影響。

Product costs were unfavorable by $28 million compared to the prior year. This was due to increased direct material costs, higher mining costs, and headwinds on pigment production costs, primarily driven by the high cost tons produced in Botlek in the first quarter as we had expected.

與前一年相比，產品成本損失了 2,800 萬美元。這是由於直接材料成本增加、採礦成本上升以及顏料生產成本受到阻力所致，主要原因是正如我們預期的那樣，第一季博特萊克生產的噸位成本較高。

Sequentially, adjusted EBITDA declined 17%. Production costs, lower TiO2 sales volumes, and higher freight costs were partially offset by favorable average selling prices, including mixes, favorable exchange rate movements, extra and savings. Compared to Q1, production costs were a $20 million headwind driven by higher cost tons produced in Q1 and sold in Q2, as expected and communicated on our last earnings call. Additionally, we received non-repeating insurance proceeds in Q1 related to the 2023 Botlek supplier outage.

調整後的 EBITDA 則是季減 17%。生產成本、較低的 TiO2 銷售量和較高的運費被有利的平均銷售價格（包括混合、有利的匯率變動、額外費用和節省）部分抵銷。與第一季相比，生產成本面臨 2000 萬美元的逆風，這是由於第一季生產的第二季銷售的噸位成本較高，正如我們上次財報電話會議所預期和傳達的那樣。此外，我們在第一季收到了與 2023 年 Botlek 供應商停電相關的非重複保險收益。

Turn to the next slide. We ended the quarter with total debt of $3.1 billion net debt of $2.9 billion. Our net leverage ratio at the end of June was 6.1 times on a trailing 12 month basis. Our weighted average interest rate in Q2 is 5.8%, and we maintain interest rate swaps such as approximately 68% of our interest rates are fixed through 2020. Importantly, our next significant debt maturity is not until 2029. We do not have financial covenants on our term loans or bonds.

翻到下一張投影片。本季末，我們的總債務為 31 億美元，淨債務為 29 億美元。截至 6 月底，我們的淨槓桿率為過去 12 個月的 6.1 倍。我們第二季的加權平均利率為 5.8%，並且我們維持利率互換，例如到 2020 年，我們約 68% 的利率將固定不變。重要的是，我們的下一筆重大債務要到 2029 年才會到期。我們的定期貸款或債券沒有財務契約。

Liquidity as of June 30 is a strong $397 million, including $132 million in cash and cash equivalents that are well distributed across the globe. We are proactively managing the balance sheet to bolster our liquidity position. And towards that end, this month, we entered into an inventory financing program that provides us with an additional $50 million of liquidity. We remain confident in our financial position and ability to weather an extended downturn.

截至 6 月 30 日的流動資金高達 3.97 億美元，其中包括分佈在全球各地的 1.32 億美元現金和現金等價物。我們正在積極管理資產負債表以增強我們的流動性狀況。為此，本月我們簽訂了一項庫存融資計劃，該計劃為我們提供了額外的 5000 萬美元流動資金。我們對我們的財務狀況和抵禦長期經濟衰退的能力仍然充滿信心。

Working capital was relatively flat to the quarter, including $25 million of restructuring payments related to the idling of robotic site. The increase in inventories in the quarter was largely offset by a decrease in accounts receivable. Our capital expenditures totaled $83 million in a quarter, with approximately 56% allocated to maintenance and safety, and 44% almost exclusively dedicated to the mining extensions in South Africa to sustain our integrated cost advantage. We returned $20 million (technical difficulty) shareholders in the form (inaudible)

本季營運資本相對持平，包括與機器人站點閒置相關的 2,500 萬美元重組付款。本季庫存的增加在很大程度上被應收帳款的減少所抵消。我們本季的資本支出總計 8,300 萬美元，其中約 56% 用於維護和安全，44% 幾乎全部用於南非的採礦擴展，以保持我們的綜合成本優勢。我們以以下形式向股東返還了 2,000 萬美元（技術難題）（聽不清楚）

I'll hand it back to John.

我會把它交還給約翰。

Thanks, John. I spoke earlier about our strategic actions that are well underway. The cost improvement prem, the idling of our Botlek facility, and further capital expenditure reductions that will help strengthen our position in this challenged macro environment.

謝謝，約翰。我之前談到了我們正在順利進行的戰略行動。成本改善、Botlek 工廠的閒置以及進一步的資本支出削減將有助於我們在這個充滿挑戰的宏觀環境中鞏固地位。

As this extended lower cycle demand environment continues, we are meeting the challenge by pulling on all the additional levers within our control. We are selectively adjusting operating rates to reduce inventory and improve working capital and free cash flow. This process utilizes our vertical integration to prioritize sites that offer greater flexibility to ramp up and down efficiently and optimizes our ore blend to balance the trade-off between cash flow and EBITDA.

隨著這種低週期需求環境的持續，我們正在利用我們控制範圍內的所有額外槓桿來應對挑戰。我們正在選擇性地調整營運率以減少庫存並改善營運資金和自由現金流。這個過程利用我們的垂直整​​合來優先考慮那些能夠提供更大靈活性以高效地增加和減少產量的站點，並優化我們的礦石混合以平衡現金流和 EBITDA 之間的權衡。

On the commercial side, we're developing targeted initiatives and evaluating further strategic sales of other products. As it relates to our capital allocation and cash position, we are scaling back further on capital expenditures, while preserving critical investments in our assets to ensure safe, reliable operations, and our Board of Directors declared a $0.05 per share dividend for the third quarter, a reduction of 60% to align with the current macro environment.

在商業方面，我們正在製定有針對性的措施並評估其他產品的進一步策略銷售。就我們的資本配置和現金狀況而言，我們正在進一步縮減資本支出，同時保留對我們資產的關鍵投資，以確保安全、可靠的運營，我們的董事會宣布第三季度每股股息為 0.05 美元，減少 60%，以適應當前的宏觀環境。

In this lower cycle demand environment where folk line performance, optimizing our global footprint, improving costs, bolstering our liquidity, and enhancing our financial flexibility. We are confident that this is the right strategy or weather the current macro environment and emerge as an even stronger competitor that will deliver sustained value for our shareholders. Given the slowdown from both a macro and an industry perspective, we have updated our 2025 financial outlook.

在這種低週期需求環境下，民間線路性能優化了我們的全球足跡，改善了成本，增強了我們的流動性，並提高了我們的財務靈活性。我們相信，這是正確的策略，可以讓我們渡過當前的宏觀環境，成為更強大的競爭對手，為股東帶來持續的價值。鑑於宏觀和行業角度的放緩，我們更新了 2025 年財務展望。

Our outlook is based on what we know today, taking into consideration a multiple of economic factors, as well as data and conversation from and with our customers. We now expect 2025 revenue to be $3 billion to $3.1 billion. Adjusted EBITDA is expected to be $410 to $460 million.

我們的展望是基於我們今天所了解的情況，考慮了多種經濟因素以及來自客戶的數據和對話。我們現在預計 2025 年的營收將達到 30 億至 31 億美元。調整後的 EBITDA 預計為 4.1 億至 4.6 億美元。

These ranges assume lower pigment and zircon volumes than previously expected, given the revision downward in global GDP for the year and revised estimates from our customers of a weaker second half than previously anticipated. However, we are assuming pigment volumes improved slightly in the second half as we are focused on executing on our commercial strategy to maintain and grow market share in targeted regions. As highlighted earlier, we continue to see strong momentum in India aided by anti-dumping duties in place in May.

鑑於今年全球 GDP 的下調以及我們的客戶對下半年經濟疲軟程度低於先前預期的估計，這些範圍假設顏料和鋯石的產量低於先前預期。然而，我們預計下半年顏料銷售將略有改善，因為我們專注於執行我們的商業策略，以維持和增加目標地區的市場份額。正如先前強調的，我們繼續看到印度在五月實施的反傾銷稅的推動下保持強勁勢頭。

We are developing additional opportunities for growth in our other products revenue stream in the second half of the year that we expect will provide incremental earnings similar to the sales we've executed in previous years. Our guidance also assumes that our cost profile improves as we execute on our cost improvement strategy in the second half of the year.

我們正在為下半年其他產品收入流的成長開發更多機會，我們預計這將帶來與前幾年銷售額類似的增量收益。我們的指導也假設，隨著我們在下半年實施成本改進策略，我們的成本狀況將會改善。

With the slowdown in demand, we will not work through the higher cost inventory as quickly as we previously anticipated, but we should see a step change in our costs in Q4 as a result of the good work our team is doing to take costs out of the business. We are well ahead of our sustained -- our sustainable cost improvement program, and we expect to exit the year with nearly double the cost savings than previously targeted.

隨著需求放緩，我們將無法像之前預期的那樣快速處理成本較高的庫存，但由於我們的團隊為降低業務成本所做的出色工作，我們應該會在第四季度看到成本發生階躍變化。我們的永續成本改進計畫已經遙遙領先，我們預計今年的成本節省將比之前的目標高出近一倍。

Additionally, as our mining projects are commissioned, they will begin to produce lower cost feedstock material that will flow through the business beginning in late Q4 and are expected to drive year-over-year cost benefits in 2026.

此外，隨著我們的採礦項目投入使用，它們將開始生產成本較低的原料，這些原料將從第四季度末開始流入我們的業務，預計到 2026 年將帶來同比成本效益。

With regards to cash, we expect the following for the year. Net cash interest of approximately $150 million, net cash taxes of less than $10 million as the capital expenditures for projects in South Africa are deductible. Working capital to be a use of $70 million to $90 million and we further reduce capital expenditures to be less than $330 million or $65 million lower than our original guide. We now expect free cash flow to be a use of $100 to $170 million.

關於現金，我們預計今年的情況如下。淨現金利息約 1.5 億美元，淨現金稅不到 1,000 萬美元，因為南非項目的資本支出可以扣除。營運資金將使用 7000 萬美元至 9000 萬美元，我們進一步將資本支出減少到 3.3 億美元以下，或比我們最初的指導低 6500 萬美元。我們現在預計自由現金流將達到 1 億至 1.7 億美元。

We are unwavering in our commitment to improving our cash position. While the macro piece is out of our direct control, we will focus on controlling how we respond. We will continue to take decisive action and have ample levers at our disposal to ensure sufficient liquidity under any conceivable scenario.

我們堅定不移地致力於改善我們的現金狀況。雖然宏觀層面不在我們的直接控制範圍內，但我們將專注於控制我們的應對方式。我們將繼續採取果斷行動，並擁有充足的槓桿，以確保在任何可能的情況下都有足夠的流動性。

Turning to the next slide, I will review how adjusted our capital allocation strategy to align with the current environment. As I mentioned earlier, we further reduce capital expenditures. Investing in our business remains critical to running safe, reliable operations, though we are pausing or delaying investments where it's economically feasible and safe to do so.

前往下一張投影片，我將回顧如何調整我們的資本配置策略以適應當前環境。正如我之前提到的，我們進一步削減資本支出。儘管我們在經濟上可行且安全的情況下暫停或推遲投資，但對我們的業務進行投資對於安全可靠的營運仍然至關重要。

Additionally, we announced that we reduced our dividend for the third quarter by 60%. This adjustment will provide enhanced balance sheet flexibility. We will re re-evaluate as the market recovers to ensure we continue to target a competitive dividend yield. Debt pay down remains a priority for Tronox in the medium and long term as we resume positive free cash flow.

此外，我們宣布將第三季的股息減少 60%。此項調整將增強資產負債表的彈性。隨著市場復甦，我們將重新評估，以確保我們繼續實現有競爭力的股息殖利率。隨著我們恢復正自由現金流，償還債務仍然是 Tronox 中長期的首要任務。

Tronox is well positioned to navigate through this economic downturn. We firmly believe that the actions we're taking will further strengthen our business to ensure ample liquidity and solidify position as the preferred strategic global supplier for our customers. I'm confident in Tronox's future and remain committed to delivering value for shareholders. That will conclude our prepared remarks.

Tronox 已做好充分準備來度過這次經濟衰退。我們堅信，我們正在採取的行動將進一步加強我們的業務，以確保充足的流動性，並鞏固作為客戶首選的全球策略供應商的地位。我對 Tronox 的未來充滿信心，並將繼續致力於為股東創造價值。我們的準備演講到此結束。

We'll now move to the Q&A protocol. So I'll turn the call back over to the operator to facilitate that. Operator?

我們現在進入問答環節。因此，我會將電話轉回給接線員以方便處理。操作員？

Thank you. We will now begin the question and answer session. (Operator Instructions)

謝謝。我們現在開始問答環節。（操作員指示）

David Begleiter, Deutsche Bank.

大衛‧貝格萊特，德意志銀行。

Hi, can you hear me?

嗨，你聽得到我說話嗎？

Yes, David, hello

是的，大衛，你好

Morning. John, just like a full year guidance, what are the various drivers and variables that will determine whether you come at the higher end or lower end of the $410 million to $460 million range?

早晨。約翰，就像全年指導一樣，有哪些驅動因素和變數將決定您的收入是處於 4.1 億美元到 4.6 億美元範圍的高端還是低端？

Thanks for the question, David. So largely as not dissimilar to what happened, I guess in the second quarter, a lot of it's going to be based on volume and price. And when we think about the guide, we're not projecting to have any significant bump in volume. There's a little bit of a move in the second half of the year, and that's largely based on some targeted gains that we believe we're going to get in India. That's the market that we continue to see positive growth in.

謝謝你的提問，大衛。因此，與第二季度發生的情況大致相同，我猜想，很大程度上將取決於數量和價格。當我們考慮指南時，我們預計數量不會有任何顯著的增長。今年下半年我們會有一些變化，這主要是基於我們相信在印度會取得的一些目標收益。這是我們持續看到的積極成長的市場。

As I mentioned on the call, there is some competitive activity out there in Europe. We saw a bit of a, it wasn't as if we saw a significant drop, but there was some competitive activity there. So where we had price increases in the second quarter, some of that's going to reverse. So some of the pricing that we had forecast in the second half of the year is not going to come in, and we're actually seeing some erosion in price.

正如我在電話中提到的，歐洲存在一些競爭活動。我們看到了一點，雖然沒有看到大幅下降，但確實存在一些競爭活動。因此，第二季價格上漲的部分趨勢將會逆轉。因此，我們預測的下半年部分價格將不會實現，而且我們實際上看到價格下降。

So I'd say, largely when we think about the EBITDA guide, it's price and volume. And there is some active piece of that, that's attached to slowing our production down as well, as we mentioned, we have pulled back some on production and we're doing that in a more in a thoughtful way to manage both cash and EBITDA, but we're balancing our sales profile to make sure it's in line with production or vice versa, balancing production to make sure it's in line with sales.

所以我想說，當我們考慮 EBITDA 指南時，主要考慮的是價格和數量。其中有一些積極因素也與減緩我們的生產速度有關，正如我們所提到的，我們已經減少了一些生產，我們正在以更加周到的方式管理現金和 EBITDA，但我們正在平衡我們的銷售狀況，以確保它與生產保持一致，反之亦然，平衡生產以確保它與銷售保持一致。

Very good. And quickly, do you have an update on your rare earth's activities?

非常好。很快，您有什麼關於稀土活動的最新進展嗎？

Look, to the rare earth is something that we're continuing to work on. I mean, that's there'll be a capital piece of that, that will come later and right now it's not part of our capital allocation strategy. But we are continuing to work on that. I made reference to some sales of other products in the back half of the year, and part of that has to do with a rare earth opportunity that we've developed along with some other products.

你看，稀土是我們正在繼續努力研究的。我的意思是，其中會有一部分資本，但那將在以後出現，而現在它還不是我們資本配置策略的一部分。但我們正在繼續努力。我提到了今年下半年其他產品的一些銷售情況，其中一部分與我們與其他一些產品一起開發的稀土機會有關。

So it's still, it's a big buzzword right now and as we think about our capability to continue to feed the elements that go into that equation, largely Monazite and then Neodymium and Praseodymium, it's something we're continuing to work on and there is an element of that in the fourth quarter.

所以它現在仍然是一個熱門詞，當我們考慮我們是否有能力繼續提供構成這個等式的元素時，主要是獨居石，然後是釹和镨，這是我們正在繼續努力的事情，第四季度會有其中的一個元素。

Thank you.

謝謝。

Peter Osterland.

彼得‧奧斯特蘭。

Hi, can you hear me?

嗨，你聽得到我說話嗎？

Yes, we can hear you. Thank you, Peter.

是的，我們能聽到你的聲音。謝謝你，彼得。

Oh, thank you. Good morning, everyone. Just wanted to start with the 2% sequential decline for TiO2 volumes that you saw on the quarter. Could you break out what you believe the growth rate was for underlying demand quarter-over-quarter and how much of a decline you realize was driven by market share?

噢，謝謝。大家早安。首先我想說的是，本季 TiO2 產量較上季下降了 2%。您能否詳細說明您認為季度環比基本需求的成長率是多少，以及您認為市場佔有率下降了多少？

Yeah, so, the North America is normally (technical difficulty) we have a, I'd say, that's northern hemisphere is where the big coding season see some uptick in volume, but it was not in line with the normal coding season. So again, I think a lot of that had to do with, I don't believe we had market share loss in North America that was just largely driven by a muted coding season, because we were up slightly in North America, 2% to 3%.

是的，所以，北美通常（技術難度）我們有一個，我想說，那是北半球，是大型編碼季節的數量有所上升的地方，但這與正常的編碼季節不一致。所以，我再次認為，這在很大程度上與我們在北美的市場份額損失有關，我不認為這主要是由於編碼季節的低迷造成的，因為我們在北美的市場份額略有增長，增長了 2% 到 3%。

In Europe, Middle East and Africa, there was some volume decline. Part of that was the market actually wasn't as robust as it was in the first quarter, so it kind of slowed down, and I think there is some element of the macroeconomic environment along with some of the tariff issues that probably weighed on some people's decision to pull down inventory.

在歐洲、中東和非洲，銷量有所下降。部分原因是市場實際上並不像第一季那麼強勁，所以有點放緩，我認為宏觀經濟環境的一些因素以及一些關稅問題可能影響了一些人減少庫存的決定。

There was an element of competitive activity there, as I mentioned, we raised prices in the second quarter and there were some competitors that pulled back for volume in that region. So Europe, Middle East, and Africa was down a bit. Asia Pacific was actually up, up pretty much in line with what we expected and that was largely driven in India because there were other areas where we saw some volume decline, but India was a big push in Asia Pacific.

正如我所提到的，那裡存在一些競爭活動，我們在第二季度提高了價格，而一些競爭對手在該地區縮減了銷售。因此歐洲、中東和非洲的跌幅略有下降。亞太地區的銷量實際上有所上升，與我們的預期基本一致，這主要是由於印度的推動，因為我們看到其他地區的銷量有所下降，但印度對亞太地區起到了很大的推動作用。

Latin America was flat, but probably it was down a bit from what we expected and that had a lot to do with some of the place where we thought they were going to come in earlier in the third quarter. It looks like they're going to come in towards the back end of the third quarter now. Hopefully that adds the color you were looking for.

拉丁美洲表現平穩，但可能比我們預期的要低一些，這很大程度上與我們認為他們會在第三季早些時候進入的一些地區有關。看起來他們現在即將進入第三季末。希望這能增添您想要的顏色。

Yes, very helpful, thank you. And then just as a follow up, I wanted to get some color on the new reductions to your CapEx forecast, just given that some of the mining cost headwinds you've had this year were driven in part by delaying some capital investments in the past, I guess could you just talk a little more about what you're cutting back on this year and, maybe what you might be sacrificing in terms of future efficiencies as a result?

是的，非常有幫助，謝謝。然後作為後續問題，我想了解一下您對資本支出預測的新削減，因為考慮到今年您遇到的一些採礦成本阻力部分是由於過去推遲了一些資本投資造成的，我想您能否再多談一下今年削減了哪些開支，以及因此您可能會犧牲哪些未來的效率？

And maybe I'll start and then I'll let John make a comment. So to be the mining investments that we had in Fairbreeze and East OFS are still on track. Fairbreeze is now up and running, so the money that we spent on Fairbreeze, the new mine is being commissioned. East OFS will come online in November, and that's still on track. So the capital reductions that we were looking at were not directed to those strategic investments as John mentioned, 44% of the capital in the quarter was actually strategic and almost all of that was exclusively in the mining.

也許我會開始，然後讓約翰發表評論。因此，我們在 Fairbreeze 和 East OFS 的採礦投資仍在進行中。Fairbreeze 現已啟動並運行，因此我們在 Fairbreeze 上投入的資金，新礦正在投入使用。東部 OFS 將於 11 月上線，目前一切仍在按計劃進行。因此，我們所考慮的資本削減並非針對約翰所提到的那些策略性投資，本季 44% 的資本實際上是策略性的，而且幾乎全部用於採礦業。

John?

約翰？

Yeah. So we've been reducing obviously as we've gone across the year from a range of $375 million to $395 million when we first gave guide earlier this year down to $330 million, so a pretty significant reduction, and it really has been in the discretionary areas. So while we believe our very high return capital projects and we put them on hold right now just to manage cash.

是的。因此，我們顯然一直在減少，因為我們全年的預算從今年早些時候首次給出的指導價的 3.75 億美元到 3.95 億美元下降到了 3.3 億美元，這是一個相當大的減少，而且這確實發生在可自由支配的領域。因此，雖然我們相信我們的高回報率資本項目，但我們現在暫時擱置它們只是為了管理現金。

So, of the $330 million that we have now, $15 million, it relates to capitalized interest and as John mentioned, $135 million relates to the two very strategic South African mining projects. So we do have about $180 million left there and as we've mentioned, about (inaudible) is from a maintenance perspective.

因此，在我們現在擁有的 3.3 億美元中，有 1500 萬美元與資本化利息有關，正如約翰所提到的，1.35 億美元與兩個非常具有戰略意義的南非採礦項目有關。因此，我們確實還剩下大約 1.8 億美元，正如我們所提到的，大約（聽不清楚）是從維護角度而言的。

Very helpful, thank you.

非常有幫助，謝謝。

Fabian Jimenez, Mizuo.

法比安·希門尼斯，水尾。

This is John Roberts. Could you elaborate on the repositioning of inventory that increased your freight costs and why are bulk shipments higher cost for freight? I would think that bulk is lower cost freight than non-bulk.

這是約翰·羅伯茨。您能否詳細說明庫存重新定位導致的運費增加的原因，以及為什麼散裝貨物的運費更高？我認為散裝貨物的運費比非散裝貨物的運費更低。

Yeah, so thanks, John. So some of that was repositioning inventory attached to the closure of Botlek. So we repositioned inventory to make sure that we had volume available to offset as we drew down the Botlek inventory. So that was a piece of it. There's also a piece around our mining group, so, as you know, there's lots of discussion around tariffs, and we repositioned a fair amount of our pig iron out of South Africa into the US ahead of that.

是的，謝謝你，約翰。因此，其中一部分是與 Botlek 關閉相關的庫存重新定位。因此，我們重新定位了庫存，以確保在減少 Botlek 庫存時有足夠的庫存來抵消。這就是其中的一部分。其中還有關於我們礦業集團的部分內容，所以，如你所知，圍繞關稅有很多討論，我們在此之前將相當一部分生鐵從南非轉移到了美國。

So those were the two primary pieces that had to do with freight. And you're right. Bulk shipping is cheaper, but there was a mixture of container and we ship Zircon by bulk. I mean, I'm sorry, we ship the pig iron by bulk.

因此，這是與貨運有關的兩個主要部分。你是對的。散裝運輸比較便宜，但是有混合貨櫃，我們是散裝運輸鋯石的。我的意思是，很抱歉，我們是散裝運輸生鐵的。

And one other thing to a lesser extent was, as John mentioned in his prepared comments, just due to our business planning process and taking advantage of our vertical integration, we did move our feedstock around a bit to different plants, so that resulted in a slightly larger cost on freight, but obviously an overall benefit.

還有一件事，程度較輕，正如約翰在他的準備好的評論中提到的那樣，僅僅由於我們的業務規劃流程和利用我們的垂直整​​合，我們確實將我們的原料轉移到不同的工廠，因此導致運費略有增加，但顯然總體上是有好處的。

And then the higher second half other product sales, you mentioned there might be some rare earth related products there, but will the bulk of that be ore that you'll be selling in the second half?

然後下半年其他產品銷售額增加，您提到可能有一些稀土相關產品，但其中大部分是下半年銷售的礦石嗎？

We're not going to go in. What I can say is that this is not an ore in the form of slag or anything like that. These are historically, we've had other product sales. They've been more attached to tailings. We're continuing to progress our strategy around rare earth. So there's a rare earth element attached to that, but this is not selling feedstock in the market.

我們不打算進去。我可以說的是，這不是礦渣形式的礦石或類似的東西。從歷史上看，我們還有其他產品銷售。他們對尾礦的感情更加深厚。我們正在繼續推進圍繞稀土的戰略。因此，其中含有稀土元素，但這不是在市場上銷售的原料。

Okay, thank you.

好的，謝謝。

Josh Spector UBS.

喬許·斯佩克特瑞銀。

Hi, good morning. I just wanted to ask on free cash flow and specifically working capital. I think, John in your earlier comments you said you're matching production to demand. I wasn't sure if that was the pigment or the mining side. And just wondering kind of what flexibility you have there, when you might take the initiative to produce mining production to address working capital at the expense of EBITDA or how you're thinking about that trade-off over the next six to nine months. Thanks.

嗨，早安。我只是想問一下自由現金流和具體的營運資金。我認為，約翰，在您之前的評論中您說過您正在使生產與需求相匹配。我不確定那是顏料還是採礦的問題。我只是想知道你們在那裡有什麼樣的靈活性，什麼時候你們可能會主動進行採礦生產來解決營運資金問題，而犧牲 EBITDA，或者你如何考慮在未來六到九個月內進行這種權衡。謝謝。

Yeah, thanks for your question, Josh. And so the short answer is, we are looking at the mining side as well. There's a little bit more work that goes into making adjustments on that side of it, but it's the mining, it's the smelters that we upgrade the material. So largely the inventory reduction we're talking to right now when we made reference to adjusting production to sales is attached to the TiO2 side of the business.

是的，謝謝你的提問，喬希。簡而言之，我們也在關注採礦方面。這方面還需要做更多的工作來調整，但我們是透過採礦和冶煉廠來升級材料的。因此，當我們提到調整生產以適應銷售時，我們現在談論的庫存減少主要與 TiO2 業務方面有關。

But as I mentioned in the prepared comments, everything is on the table now, and we're looking at all of that. We're trying to use our vertical integration to make sure we manage that balance between cash and EBITDA.

但正如我在準備好的評論中提到的那樣，現在一切都已擺在桌面上，我們正​​在研究所有這些。我們正在嘗試利用垂直整合來確保現金和 EBITDA 之間的平衡。

Yeah. And if you take a look at our working cap, both our working capital and our free cash flow, now we do expect to generate cash from both in the second half of the year. They primarily do a lot of the reasons that John had mentioned for bringing our production which impacts more heavily in the second half as we did build inventory in the first half of the year. So seeing inventory come down.

是的。如果你看一下我們的營運上限，包括我們的營運資本和我們的自由現金流，現在我們確實預計在今年下半年從這兩項中產生現金。他們主要按照約翰提到的許多理由來做，這給我們的生產帶來了更大的影響，因為我們在上半年確實建立了庫存。因此庫存下降。

Additionally, the cost improvement program will help our inventory as well as it will be lower cost inventory that we're going to place on the balance sheet ultimately to be sold. And then the other big drivers of working capital relate just to active management of the other working capital AR and AP.

此外，成本改進計劃將有助於我們的庫存，並且成本較低的庫存最終將被放在資產負債表上進行銷售。然後，營運資本的其他主要驅動因素僅與其他營運資本 AR 和 AP 的積極管理有關。

I think it's worth maybe just a little bit more color on the cost improvement program because when we announced that program, it was $125 million to $175 million run rate by the end of 2026, and we had a target of $25 million to $35 million run rate by the end of 2025. As I mentioned in the prepared comments, we are well above that, more than double that at this stage, and we're making great progress on that.

我認為成本改進計劃可能值得更詳細地介紹，因為當我們宣布該計劃時，到 2026 年底，其運行率是 1.25 億美元至 1.75 億美元，而我們的目標是到 2025 年底，運行率是 2500 萬至 3500 萬美元。正如我在準備好的評論中提到的那樣，我們已經遠遠超過了這個數字，目前已經是這個數字的兩倍多，而且我們在這方面取得了巨大的進展。

And a lot of that will, as we get into, there is some EBITDA impact in the fourth quarter, but most of that will be working its way into the production process and through the balance sheet as we get into 2026, but we have a high level of evidence and what our teams are doing at every (technical difficulty) of our sites to look at (technical difficulty) creative ways to pull cost out and we're well ahead of where we thought we would be and have high expectations that will exceed those targets.

隨著我們進入第四季度，其中許多都會對 EBITDA 產生一些影響，但其中大部分將在 2026 年進入生產過程並透過資產負債表體現出來，但我們擁有大量證據，我們的團隊正在每個站點（技術難度）尋找（技術難度）創造性的方法來降低成本，而且我們遠遠超出了我們的預期，並抱有超出這些目標的高期望。

Alright. And I guess if I could just follow up quickly, I mean this might be too tough to answer, but if we go sideways from here, is working capital a tailwind next year? You're still a headwind based on how you're producing.

好吧。我想如果我能快速跟進的話，我的意思是這可能很難回答，但如果我們從這裡開始，明年營運資金是否會順風？根據您的生產方式，您仍然面臨逆風。

If we go sideways from here, we'll continue to match production with sales. So the TiO2 would not be an increase, and that becomes the question on the mining side of it, how we manage that, right? So that's the work we're still managing through right now, but suffice it to say that we're looking at mining as well.

如果我們從現在開始走下坡路，我們將繼續將產量與銷售相匹配。因此 TiO2 不會增加，這就成為採礦方面的問題，我們如何管理它，對嗎？這就是我們目前仍在進行的工作，但可以說我們也在關注採礦。

We do have additional levers that we can take right now based on what we see the market outlook and using the value of our vertical integration, we think it's appropriate at this point.

根據我們對市場前景的了解，並利用我們的垂直整​​合的價值，我們現在確實可以採取額外的措施，我們認為這在目前是合適的。

And the adjustments we made to production are not the same order of magnitude EBITDA impact as they were in this last downturn because, we're looking at sites that can be flexed more efficiently and to John's point, we repositioned some ore to make sure that we had the right ore blends to optimize cash and EBITDA.

我們對生產所做的調整對 EBITDA 的影響與上次經濟衰退時不同，因為我們正在尋找可以更有效地靈活調整的場地，正如約翰所說，我們重新定位了一些礦石，以確保我們擁有正確的礦石混合物，從而優化現金和 EBITDA。

Thank you.

謝謝。

Thanks, Josh.

謝謝，喬希。

Jeff Zekauskas, JPMorgan.

摩根大通的 Jeff Zekauskas。

Thanks very much. I think your EBITDA guide is $410 million to $460 million for this year, and you did $205 million in the first half and $93 million in the second quarter. So in order to reach the bottom of your guide, you've got to do $102 million or $103 million on average for the next two quarters to reach the top of your guide, you need to do $127.5 million.

非常感謝。我認為您今年的 EBITDA 預期是 4.1 億美元至 4.6 億美元，而上半年的 EBITDA 為 2.05 億美元，第二季的 EBITDA 為 9,300 萬美元。因此，為了達到指導的最低水平，你必須在接下來的兩個季度平均完成 1.02 億美元或 1.03 億美元，而要達到指導的最高水平，你需要完成 1.275 億美元。

In general, the fourth quarter is usually a seasonally light quarter. What is it about the third and fourth quarter in either the DA terms that might lead you to earn more than you did second, and that if you weren't at the second quarter rate, I think you get to something like [$390 million].

總體而言，第四季度通常是季節性淡季。在 DA 條款中，第三季和第四季的什麼情況可能導致你的收入超過第二季？如果你的收入沒有達到第二季的水平，我認為你會得到類似這樣的結果[3.9億美元]。

Thanks Jeff. So when we think about Q2 to Q3, you should think flat, up or down a little bit. It's not going to be a huge lift and the big -- the fourth quarter impact and we mentioned this other opportunity that we're working on. Historically we have in the past, we've had these other product sales, and that is likely to come in the fourth quarter. And that is the piece that will have a swing in that number in the fourth quarter. John?

謝謝傑夫。因此，當我們考慮第二季到第三季時，您應該考慮持平、略微上升或略微下降。這不會帶來巨大的提升，也不會對第四季度產生重大影響，我們提到了我們正在努力的另一個機會。從歷史上看，我們過去有過這些其他產品的銷售，這很可能會在第四季度實現。而這正是第四季數字將會波動的部分。約翰？

Keep in mind those are very profitable sales for us. So, and if you look at the magnitude of what we've done in the past, it would approximate the math that you laid out. One other thing as well is the cost improvement program that we've taken taken over and been underway, and as John mentioned, we expect more than double this year. A lot of that goes to the balance sheet. We do see real savings this year and as you go across the quarters, it does increase just due to the timing of execution and getting full run rate of the savings.

請記住，這些對我們來說都是非常有利可圖的銷售。因此，如果你看看我們過去所做的事情的規模，它就會近似於你所列出的數學。還有一件事是我們已經接手並正在進行的成本改進計劃，正如約翰所提到的，我們預計今年的成本改進計劃將增加一倍以上。其中很大一部分都進入了資產負債表。我們今年確實看到了真正的節省，而且隨著各個季度的推移，節省確實會增加，這僅僅是因為執行的時間和節省的全部運行率。

But we're anticipating, maybe as much as $10 million of cost improvement that will fall into the bottom line and largely latent Q3 and Q4.

但我們預計，成本改善可能高達 1000 萬美元，這將計入底線，並且主要在第三季和第四季產生。

And then can you talk about what's happening in India and what kind of volume you may be picking up, and you talk about Brazil and what kind of volume you may be losing. And (technical difficulty) the geographic pricing dynamic. That is, where competitive conditions greater where they.

然後您能否談談印度的情況以及您可能獲得多少交易量，再談談巴西的情況以及您可能失去多少交易量。以及（技術難度）地理定價動態。也就是說，哪裡的競爭條件越大，他們就會去哪裡。

Now I'll start with the last question first. So the competitive environment right now, I would say as far as pricing goes -- are in areas like Europe, Middle East and Africa, I mentioned that there was a volume decline in that region where we had price increases in the second quarter and we had some competitive activity where some competitors actually reduced price to move volumes. So you've got Europe, Middle East, and Africa.

現在我先回答最後一個問題。因此，就定價而言，目前的競爭環境是在歐洲、中東和非洲等地區，我提到過，這些地區的銷量有所下降，而我們在第二季度提高了價格，並且我們開展了一些競爭活動，一些競爭對手實際上降低了價格來提高銷量。所以你有歐洲、中東和非洲。

Middle East is a competitive environment right now. It's not a duty affected area and so there's obviously some competitive activity as China continues to reposition to try to manage some of their sales, although they are -- India has been a big impact. There's been some competitive activity with even some Western suppliers moving volume there. Now that being said, our volume wasn't down. Q1 to Q2 on in Latin America, but we were expecting a little bit of a lift there.

中東目前是一個競爭激烈的環境。這不是一個受關稅影響的地區，因此顯然存在一些競爭活動，因為中國繼續重新定位以試圖管理其部分銷售，儘管印度受到了很大的影響。那裡存在一些競爭活動，甚至一些西方供應商也開始將產品轉移到那裡。話雖這麼說，但我們的音量並沒有降低。拉丁美洲在第一季至第二季的情況類似，但我們預計那裡會略有成長。

North America has been, as I mentioned, our volumes are up slightly there. It's been stable on price, and in Asia Pacific, again, due to some of the shifting around the volume, largely due to impacted areas, we see the volume upside in India and there's competitive activity in a lot of the other areas in Asia Pacific where China is continuing to try to reposition from some of the share that they're losing in those duty affected areas.

正如我所提到的，北美的銷量略有上升。價格一直保持穩定，在亞太地區，由於銷量的一些變化（主要是由於受影響的地區），我們看到印度的銷量上升，並且亞太地區的許多其他地區也存在競爭活動，中國正在繼續嘗試重新定位他們在這些受關稅影響地區失去的部分份額。

Thanks.

謝謝。

Thank you.

謝謝。

Hassan Ahmed, Alembic Global Advisors.

Hassan Ahmed，Alembic Global Advisors。

Good morning, John. First of all, just wanted to sort of understand a little more about how you guys thought about the dividend cut. Look, I mean, at the end of the day, I understand this downturn has been far more sort of drawn out than prior downturns. But I mean, the industry is cyclical and will continue to remain cyclical.

早安，約翰。首先，我只是想進一步了解你們對削減股利的看法。聽著，我的意思是，歸根結底，我明白這次經濟衰退比以往的經濟衰退要持久得多。但我的意思是，這個行業是有週期性的，並且將繼續保持週期性。

So I'm just trying to understand the logic in a cyclical industry of having a fixed dividend. I mean, did you guys think about, maybe, incorporating some variability into that dividend, maybe having possibly a fixed payout ratio. I mean, just the thought process around the magnitude of the card as well as the logic behind having a fixed dividend.

所以我只是想了解週期性產業中固定股利的邏輯。我的意思是，你們有沒有想過，也許在股息中加入一些可變性，也許有一個固定的派息率。我的意思是，只是圍繞著卡片的大小以及固定股息背後的邏輯的思考過程。

Thanks Hassan. So obviously we did spend a lot of time thinking about that reduction in the dividend, and it was aligned to the current macro environment. And as I said in prepared comments, as the macro changes, we'll continue to evaluate that to make sure it's a competitive dividend. We still feel that the dividend is important. It's part of our capital allocation strategy, but in this environment we felt it was right sized, so that we can manage our liquidity through this longer downturn than we expected job.

謝謝哈桑。因此，顯然我們確實花了很多時間考慮減少股息，而這與當前的宏觀環境一致。正如我在準備好的評論中所說的那樣，隨著宏觀經濟的變化，我們將繼續評估以確保它具有競爭力。我們仍然認為股利很重要。這是我們資本配置策略的一部分，但在這種環境下，我們認為它的規模是合適的，這樣我們就可以在比我們預期更長的低迷時期管理我們的流動性。

Yeah, obviously we looked at a lot of different analyses, had a lot of different discussions around it, and obviously did cut in several other areas. So all that went into our calculus of cutting the dividend by 60%. We really want to just maintain our financial flexibility in this market and as we mentioned earlier, we will relook at the dividend at the appropriate time period.

是的，顯然我們研究了很多不同的分析，圍繞它進行了很多不同的討論，並且顯然在其他幾個領域進行了削減。因此，我們將所有這些都納入削減 60% 股息的計算中。我們確實希望在這個市場上保持財務靈活性，正如我們之前提到的，我們將在適當的時間段重新審視股息。

Understood. And as a follow up. I mean, you guys have a huge exposure to heavy minerals mining. I mean, if I have my numbers correct, I mean you guys are producing as much as 3.7 million tons of heavy (inaudible). In light of what we just saw from MP materials, the Department of Defense coming in, in Australia, and I understand, your exposures in South Africa as well as Australia, but even in Australia, I mean, the government's sort of collaborating with Iluka.

明白了。並作為後續行動。我的意思是，你們在重礦物開採方面有著大量的經驗。如果我的數字正確的話，你們生產了多達 370 萬噸重（聽不清楚）。根據我們剛剛從 MP 材料中看到的情況，國防部正在進入澳大利亞，我理解您在南非和澳大利亞的曝光情況，但即使在澳大利亞，我的意思是，政府也在與 Iluka 合作。

I mean, are you having discussions with local governments, maybe other sort of metals and mining companies, processes and the like to maybe sort of accelerate the growth of that sort of product area?

我的意思是，您是否正在與當地政府、其他類型的金屬和礦業公司、流程等進行討論，以加速此類產品領域的成長？

Yeah, thanks, Hassan, and the answer is yes on all of those. So, we spent a lot of time in multiple jurisdictions around looking up with opportunities where we could get funding. So US, Saudi Arabia, Brazil, Australia, those are all works in progress and we continue to collaborate with others that are in that space.

是的，謝謝，哈桑，所有這些問題的答案都是肯定的。因此，我們花了大量時間在多個司法管轄區尋找可以獲得資金的機會。因此，美國、沙烏地阿拉伯、巴西、澳洲等國都在進行中，我們將繼續與該領域的其他國家合作。

And one of the advantages we have in our rare earth base is that we also have heavies. And heavies are some of the shortfall and some of these other opportunities that are out there. There was a lot, you can read a lot into MP, but that was a great opportunity for them. And what I can tell you is that we're working with lots of different governments and companies to try to figure out how we optimize and accelerate. How we might benefit from that. And as I mentioned, there's an element of that work that has to do with some of the sales that are happening in the fourth quarter.

我們的稀土基地的優點之一是我們還擁有重質材料。重量級人物是一些不足之處，也是一些其他存在的機會。有很多東西，你可以從 MP 中讀出很多東西，但這對他們來說是一個很好的機會。我可以告訴你的是，我們正在與許多不同的政府和公司合作，試圖找出優化和加速的方法。我們能從中受益嗎？正如我所提到的，這項工作的一部分與第四季度的一些銷售有關。

Very helpful, John. Thank you so much.

非常有幫助，約翰。太感謝了。

Thank you.

謝謝。

John Mcnulty, BMO Capital Markets.

蒙特利爾銀行資本市場 (BMO Capital Markets) 的 John Mcnulty。

Yeah, good morning, can you hear me?

是的，早上好，你聽得到我說話嗎？

Yeah, we can hear you. Thank you.

是的，我們能聽到你的聲音。謝謝。

Perfect. I just wanted to dig in, so I guess, we've seen a bunch of capacity closures this year, including your own Botlek. We saw some last year we saw China. It looks like it's dialed back a decent amount of production and by our count, it's around 6% of nameplate capacity and yet if anything, it seems like the environment has gotten worse.

完美的。我只是想深入了解一下，所以我想，今年我們已經看到很多產能關閉，包括你們自己的 Botlek。去年我們看到了一些，我們看到了中國。看起來，它的產量已經減少了相當多，根據我們的統計，大約只有額定產能的 6%，但如果有變化的話，似乎環境變得更糟了。

So are we getting closer to that tipping point where the supply has been dialed back enough where the supply demand can start to tighten at this point? Are there others factors that we should be considering. I understand the the demand environment's not robust by any means, but it doesn't seem like it's contracted by as much as maybe supply has. So I guess, can you help us just to think about the cycle and where we are and maybe some of the puts and takes around that?

那麼，我們是否正在接近那個臨界點，即供應量已經回落到足夠低的水平，而供應需求此時可以開始收緊？我們還應該考慮其他因素嗎？我知道需求環境無論如何都不算​​強勁，但似乎沒有供應萎縮那麼多。所以我想，您能否幫助我們思考這個週期以及我們所處的位置，以及圍繞這個週期的一些優點和缺點？

Yeah, thanks, John. It's a great question. And look, I mean, at the end of the day, the cycle has been longer than any other one that I've experienced, and I do believe that we're hedging towards the cycle going the other direction. To your point on production. Since 2023, there's been 750,000 ton capacity taken out. That's a share of some of it that's in Japan. Some of it was in Taiwan, some of it was in Europe, some of it was in China as recently as last in the last two weeks.

是的，謝謝，約翰。這是一個很好的問題。我的意思是，從長遠來看，這個週期比我經歷過的任何其他週期都要長，而且我確實相信，我們正在朝著另一個方向邁進。關於生產，您提到了這一點。自2023年以來，已削減了75萬噸的產能。其中一部分在日本。其中一些發生在台灣，有些發生在歐洲，有些發生在中國，最近兩週就發生在中國。

There's been two Chinese companies that have announced [280]. Talking about recovery, clearly with the last recovery, but there is less capacity there, and I would say that there are probably other capacity announcements that are still hanging out there that haven't happened yet. And I probably don't need to go into a lot of detail. You can imagine where that might be with some companies that have been trying to restructure for a while.

有兩家中國公司宣布[280]談到復甦，顯然是上一次復甦，但那裡的產能較少，我想說可能還有其他產能公告尚未公佈。我可能不需要講太多細節。你可以想像，對於那些已經嘗試重組一段時間的公司來說，情況可能會是如何。

So, I do believe that the market is going to recover. It's a matter of when, not if. And we are putting our business in a place where we feel we'll be able to weather that period of time, whether it's three months or another eight months, so that we can come to the other side a stronger competitor.

所以，我確實相信市場將會復甦。這只是時間問題，而不是是否會發生的問題。我們將把我們的業務放在一個我們認為能夠經受住那段時間的地方，無論是三個月還是八個月，這樣我們就可以面對更強大的競爭對手。

Got it. Okay, no, that's helpful. And then I guess with the dialing back or the (inaudible) like, I guess you guys had been about when fully running had been about 85% vertically integrated. I assume this pushes you closer to fully integrated, is that where you want to be or would you consider possibly cleaving off a piece of the mining business is that something that would be even remotely palatable to you to kind of maybe change that internal balance, I guess how should we be thinking about that longer term?

知道了。好的，不，這很有幫助。然後我想透過撥回或（聽不清楚）之類的，我想你們在完全運行時已經實現了大約 85％ 的垂直整合。我認為這會使你們更接近完全整合，這是你想要的嗎？或者你會考慮剝離一部分採礦業務嗎？這對你來說是否是可以接受的，也許可以改變內在平衡，我想我們應該如何從長遠角度來考慮這個問題？

Yeah, so that's a great question as well, and we're not 100% vertically integrated. There is still a need for some feedstock. And in this particular stage, we're pairing back on that because we've pulled back production. But in the long term, we'll continue to look at what that right balance is and we don't want to be long on feedstock for sure, and there's a right balance to strike there and as we said on the last call, we're going to continue to look at our asset footprint and try to make sure that we're right size, so that that balance can continue to give us that advantage that we've referenced before $300 to $400 a ton from buying feedstock on the open market.

是的，這也是一個很好的問題，我們不是 100% 垂直整合的。仍然需要一些原料。在這個特定階段，我們正在重新配對，因為我們已經停止了生產。但從長遠來看，我們將繼續關注正確的平衡點，我們肯定不想在原料上做多，需要取得正確的平衡，正如我們在上次電話會議上所說的那樣，我們將繼續關注我們的資產足跡，並努力確保我們的規模合適，以便這種平衡可以繼續為我們帶來優勢，就像我們之前提到的那樣，通過在公開市場上購買原料，每噸可以獲得 300 美元的優勢。

Got it. Thanks very much for the color.

知道了。非常感謝這個顏色。

Thank you.

謝謝。

Olivia Lyle, Bank of America.

奧利維亞·萊爾，美國銀行。

Thank you. This is Roger on for Olivia. I have two questions. Regarding the $50 million inventory financing facilities, and I suspect we'll see more in the queue, but can you give us a heads up on what the rate and maturity of that facility is? And will that facility be on or off balance sheet, meaning you're going to, if on balance sheet, the inventory stays on balance sheet and we'll see in the debt stack. Any drawings amount under that facility.

謝謝。這是羅傑為奧莉維亞表演的。我有兩個問題。關於 5000 萬美元的庫存融資工具，我懷疑我們會在隊列中看到更多，但您能否告訴我們該工具的利率和期限是多少？該設施將在資產負債表內還是表外，這意味著如果在資產負債表上，庫存將保留在資產負債表上，我們將在債務堆中看到。該設施下的任何提款金額。

Yeah, thanks Roger for the question. Obviously it added a significant amount of liquidity in this month for us at $50 million. It is not recorded as debt on our balance sheet, but we will be recording it in the other liability section of it, and we do have a very competitive rate just given the level of inventory, the security that they have backing it, and it is a short term facility that's renewable every several months.

是的，感謝羅傑提出這個問題。顯然，本月它為我們增加了 5000 萬美元的大量流動資金。它不會在我們的資產負債表上記錄為債務，但我們會將其記錄在其他負債部分，而且考慮到庫存水平、他們支持的擔保，我們的利率確實非常有競爭力，而且它是一種每幾個月可續期一次的短期貸款。

Just several months. So, okay, but, no. Second question is, so how would you compare your volumes down 11% every year and flat pricing and (inaudible) on their pre-release said that their TiO2 sales were up high single digits. I suspect thought about that. I wonder if you might share any thoughts you had.

僅僅幾個月。所以，好吧，但是，不行。第二個問題是，那麼您如何比較每年銷量下降 11% 和固定價格，以及（聽不清楚）他們在預發佈時表示他們的 TiO2 銷售額增長了個位數。我懷疑我考慮過這一點。我想知道您是否可以分享您的想法。

Yeah, so look, if you look over and there's a lot of fluctuations in market share, and I would just say that the guide that we had for the second quarter initially was to be mid to high single digits and we were down. And I'll go back to the comments that I made before in North America that was largely driven by a muted coding season. Our volumes were up, but they weren't up as what normally what they would have been.

是的，所以，如果你看一下，你會發現市佔率波動很大，我只想說，我們最初對第二季的預期是中高個位數，但我們的市佔率卻下降了。我將回到我之前在北美發表的評論，這主要是由於編碼季節的低迷。我們的音量是提高了，但並沒有達到正常的水平。

In Europe, our volumes were Europe, Middle East, and Africa, they were down, and part of that had to do with the market actually just not being as robust as we thought it. We weren't planning for it to be stronger, but it was actually weaker than we expected it to be. And there was competitive activity over there, as I mentioned, we were raising prices and we had some competitors that were losing prices and we picked, we lost a little volume.

在歐洲，我們的出口量在歐洲、中東和非洲都有所下降，部分原因是市場實際上並不像我們想像的那麼強勁。我們並沒有計劃讓它變得更強，但它實際上比我們預期的要弱。正如我所提到的那樣，那裡存在競爭活動，我們正在提高價格，而我們的一些競爭對手正在降價，我們損失了一點銷售。

Asia Pacific, our volumes were up, largely tied to what we were going to see in India. I mentioned before with some growth in that area. In Latin America, although flat, we were projecting that to be up. And there was some market share shift in that area as well. So when I mentioned our strategy from a commercial perspective, moving into the balance of the year, it's to maintain and or grow share targeted regions, and the targeted regions for growth are largely in India, and our objective is to maintain our share at normalized rates throughout the year.

在亞太地區，我們的銷售量有所上升，這主要與我們在印度的銷售量有關。我之前提到過該領域有一些增長。在拉丁美洲，儘管成長持平，但我們預計這一數字將會上升。該地區的市場份額也發生了一些變化。因此，當我從商業角度提到我們的策略時，進入今年的平衡階段，我們的策略是維持或增加目標地區的份額，而成長的目標地區主要在印度，我們的目標是全年保持我們的份額處於正常水平。

So I can't speak too much to [Comors] on what they announced back in June. And, but generically I know what's happening in the market with competition. And, in the reasons that I mentioned, there's -- the competition is, it's elevated.

因此我無法向 [Comors] 透露太多有關他們在六月宣布的消息。但總的來說，我知道市場競爭的情況。而且，我提到的原因在於──競爭更加激烈了。

Thank you very much.

非常感謝。

(Operator Instructions)

（操作員指示）

Edward Brucker, Barclays.

巴克萊銀行的愛德華‧布魯克。

Hey, thanks for taking the question this morning. First one, back on the supply or some of the supply questions, with all the capacity reductions that we've seen and that you've mentioned, would you say, broadly speaking, overall supply is closer to underlying demand right now, or is it something that we don't need demand to improve in order to kind of fill that supply [GAAP]?

嘿，感謝您今天早上回答這個問題。首先，回到供應問題，或者說一些供應問題，鑑於我們所看到的以及您提到的所有產能削減，您是否認為，從廣義上講，目前總體供應更接近潛在需求，或者我們不需要需求改善就能填補供應[公認會計準則]？

Yeah. So the biggest, I'd say variable in answering that question is China. The sales into China are not significant. We have a plant over there. So we have good visibility into that. But so I'd say, if you think about the answer to that question globally, I think you're right. China has a big impact on that. So China has some headwinds with duty affected areas.

是的。因此，我認為回答這個問題的最大變數是中國。對中國的銷售額並不大。我們在那裡有一家工廠。所以我們對此有很好的了解。但我想說，如果你從全球角度考慮這個問題的答案，我認為你是對的。中國對此影響巨大。因此，中國在受關稅影響的地區面臨一些阻力。

We believe based on information that I provided, there's two plants that have been announced that they're willing. Two are closing, there's other assets, I think production that's being adjusted accordingly. So, I think the better answer is, as that Chinese market recovers, and I can't tell you when that's going to happen, a lot of that volume is going to get sucked up.

我們相信，根據我提供的信息，有兩家工廠已經宣布願意合作。其中兩家正在關閉，還有其他資產，我認為生產正在相應調整。因此，我認為更好的答案是，隨著中國市場的復甦，雖然我無法告訴你什麼時候會發生這種情況，但許多交易量都會被吸收。

But again, there hasn't been a tremendous amount of capacity added since '23, there's 740,000 tons that's come out of the market. And so I do think as the market recovers, even if it's not as robust of a recovery as it was historically, you're going to see a shift in supply, demand and price accordingly because where we are in price right now is not a sustainable place.

但自 2023 年以來，產能並沒有大幅增加，有 74 萬噸退出了市場。因此，我確實認為，隨著市場復甦，即使復甦不如歷史上那麼強勁，你也會看到供應、需求和價格發生相應的變化，因為我們目前的價格水平是不可持續的。

Got it. That's helpful. I see one, could you, if you have it on hand, just give us a secured debt capacity. And then is there any thought to using secure bond or secured debt to boost liquidity?

知道了。這很有幫助。我看到一個，如果您手邊有的話，可以給我們一個有擔保的債務能力嗎？那麼有沒有考慮使用擔保債券或擔保債務來提高流動性呢？

So I wasn't following your first question. Obviously we can go out and raise the debt capital markets. We continue to monitor them in this environment to maintain financial flexibility. So we do look at the market and evaluate whether or not, we do want to raise any additional debt in the markets, but at this point we, as I mentioned, we do have sufficient liquidity, particularly with the action that we took for this inventory raise, but we will monitor the market.

所以我沒有理解你的第一個問題。顯然，我們可以走出去，籌集債務資本市場。我們將繼續在這種環境下監控它們，以保持財務靈活性。因此，我們確實會觀察市場並評估我們是否確實想在市場上增加任何額外的債務，但正如我所提到的，目前我們確實有足夠的流動性，特別是我們為此次庫存增加採取的行動，但我們會監控市場。

What was your first question again?

您的第一個問題是什麼？

First question is just on how much secure that capacity you have.

第一個問題是您的安全容量有多大。

Okay, I think maybe we'll follow up with you after this call, if that's okay.

好的，如果可以的話，我想我們也許會在這次通話後跟進您。

Yeah, absolutely.

是的，絕對是如此。

Vincent Andrews, Morgan Stanley.

摩根士丹利的文森安德魯斯。

Good morning. This is Justin Pellegrino on for Vincent. Just curious if you could discuss the differences in markets that have announced duties specifically between Europe and India. You're seeing the competitive pressure in Europe, but you're seeing strength in India. Is that, there was product placed in Europe, but maybe not so much in India, or there are differences in demand and we're just hoping you can kind of discuss the differences that you're seeing in those duty markets. Thank you.

早安.這是賈斯汀·佩萊格里諾 (Justin Pellegrino) 為文森特 (Vincent) 表演的。我只是好奇您是否可以討論一下已宣布關稅的市場之間的差異，特別是歐洲和印度之間的差異。你看到了歐洲的競爭壓力，但你也看到了印度的實力。是不是說，產品在歐洲有銷售，但在印度可能銷售不多，或者需求有差異，我們只是希望您能討論一下您在這些關稅市場中看到的差異。謝謝。

Thanks Justin. So in Europe, we saw a big bump up in our sales profile as a result of the duties, and we're still seeing that, but there has been an increased level of competitive activity as there are more suppliers that are feeding into that market. So we did see a decline in the second quarter, but we still, there still are advantages attached to the duties that are in place in Europe, and we'll continue to benefit from that.

謝謝賈斯汀。因此，在歐洲，由於關稅的影響，我們的銷售額大幅成長，而且這種趨勢仍在持續，但隨著越來越多的供應商進入歐洲市場，競爭活動也日益激烈。因此，我們確實看到了第二季的下滑，但歐洲現行的關稅仍然具有優勢，我們將繼續從中受益。

In India specifically, one of the advantages that we have is that we ship into India from Australia. Australia has a free trade agreement. Everybody else that ships into India now, including China with a much higher duty, there's already a 10% duty. So we were positioned well in India to begin with. We have, it's one, it's the second largest market that we were selling into prior to the duties going into effect. It's been a strategic market for us for years. It's got a high growth rate, low capital TiO2 low per capita TiO2 consumption, so there's lots of growth opportunity there.

具體來說，在印度，我們的優勢之一是我們可以從澳洲運送到印度。澳洲有自由貿易協定。現在，所有其他向印度出口的商品，包括關稅較高的中國，都已經徵收了 10% 的關稅。因此，我們一開始在印度就佔據了有利地位。這是關稅生效之前我們銷售的第二大市場。多年來，它一直是我們的策略市場。它的成長率很高，二氧化鈦資本成本低，人均二氧化鈦消耗量也低，因此有許多成長機會。

So that kind of -- and in Brazil, that's an opportunity that's a 180,000 tons of your market. You had 100,000 tons of Chinese material going in there. The duties were in place until April 21. Those provisional duties lapsed based on and we knew they were going to lapse because the investigation was going to last longer than six months and provisional duties can only be in place for six months.

所以那種——在巴西，這是一個價值 18 萬噸的市場機會。有10萬噸中國材料運往那裡。這些關稅將持續到4月21日。這些臨時關稅失效是基於並且我們知道它們將會失效，因為調查將持續超過六個月，而臨時關稅只能實施六個月。

So I mentioned our sales in Latin America were flat Q1 to Q2. We would have expected those provisional duties to become permanent a little bit sooner than where they are. It looks like it's going to be more towards the end of the investigation period, which has a deadline at the end of the quarter, end of the third quarter. So that's the other area where we still have opportunity, but the Chinese have exploited that by continuing to ship in there while there's this gap between provisionals and final duties being implicated.

我提到，我們第一季至第二季在拉丁美洲的銷售額持平。我們原本預期這些臨時關稅將比現在更快變成永久性關稅。看起來，調查期即將結束，截止日期是本季末，也就是第三季末。這是我們仍有機會的另一個領域，但中國人利用了這個機會，在臨時關稅和最終關稅之間存在差距的情況下繼續向那裡發貨。

And those are the three areas where duties are in place. And before they were in place, China was exporting about 300,000 tons into India, about 258,000 tons into the European market, and 100,000 tons into Brazil. So that's the 600,000 tons that has become in play, not to us, but for other competitors that are non-Chinese.

這就是需要履行職責的三個領域。在這些措施實施之前，中國向印度出口了約 30 萬噸，向歐洲市場出口了約 25.8 萬噸，向巴西出口了 10 萬噸。所以這 60 萬噸不是我們爭取的，而是中國以外的其他競爭對手爭取的。

Okay, that makes sense. And then just want to follow up, you noted that you saw the bit of increased pressure in Europe in 2Q. Can you just give us an idea of what you're thinking about sequentially for Europe as it relates to demand for products as well as price, just as those duties are still in play, given the increase we saw in Q1, then kind of followed by the increasing Q2, what are you thinking of sequentially for Q3. Thank you.

好的，這很有道理。然後只是想跟進一下，您注意到第二季度歐洲的壓力增加。您能否簡單介紹一下您對歐洲產品需求和價格的後續看法，正如這些關稅仍在發揮作用一樣，鑑於我們在第一季度看到的增長，然後是第二季度的增長，您對第三季度的後續看法是什麼？謝謝。

Yes, so we don't, I'm not going to provide a guide on pricing by region, but I will say that factored into the guide for Q3, there's 2% to 3% move on price on the downside, that's in the guide. When we start thinking about Europe in general, we're not seeing a tremendous amount of downward movement. It's more in line, it's a holiday season right now, so August is typically a low month, but we already know what happened in July and September is forecasted to move in the right zone.

是的，所以我們不會，我不會提供按地區劃分的定價指南，但我會說，考慮到第三季的指南，價格下跌幅度為 2% 到 3%，這是在指南中。當我們開始思考整個歐洲時，我們並沒有看到巨大的下滑趨勢。這更符合預期，現在正值假期，所以八月通常是淡季，但我們已經知道七月發生的情況，預計九月將進入正確的區域。

So we're not expecting a significant reduction. I did mention that we are going to focus on maintaining our market share and also look at targeted areas for growth, and the growth is probably more aligned to India, and maintaining share would be everywhere else.

所以我們並不期望出現大幅減少。我確實提到過，我們將專注於保持我們的市場份額，同時也尋找有針對性的成長領域，而成長可能更符合印度的需要，而保持份額則會在其他任何地方。

Thank you.

謝謝。

This concludes the Q&A and today's call. Thank you for joining and have a great day.

今天的問答和電話會議到此結束。感謝您的加入並祝您有愉快的一天。