The Chemours Company (NYSE:CC), in its Third Quarter 2023 Results Conference Call, addressed the challenges faced in 2023, primarily due to lower TT volumes, and outlined its future plans for growth and cost reduction. Despite demand weakness in the APM business, the company achieved double-digit growth in performance solutions and record net sales in the TSS business. The company is also optimistic about the potential growth in the immersion cooling market and expects gradual demand gains in the TT business.
Key takeaways from the call include:
- The company plans to focus on cost savings and aims to become the most cost-competitive TiO2 producer.
- The Chemours Company is excited about the adoption of HFO platforms and the potential for growth in the immersion cooling market.
- They plan to commercialize their immersion cooling product, which can significantly reduce energy consumption and water usage, in 2025.
- The company is actively working on expansion plans for their PFA business for semiconductors and Nafion for the hydrogen market.
- They expect strong growth in auto bills and increased EV adoption.
Despite the challenges with TT volumes and weakness in the advanced materials franchise, the company is focusing on growth in their PFA business for semiconductors and Nafion for the hydrogen market. The company is sold out of both Nafion and PFA and is actively working on expansion plans.
The Chemours Company has also outlined its plans to commercialize a product for cooling data centers, which significantly reduces water usage and eliminates the need to cool massive amounts of air. The product is currently going through the registration process and is expected to be commercialized in 2025, with significant growth in the addressable market expected by 2030.
In terms of cost savings, the company expects to achieve $100 million in run rate savings next year, with $50 million of that coming from the closure of the Kuan Yin facility. They also plan to provide updates on additional cost savings in the coming quarters.
The company is committed to disciplined capital allocation, aiming to improve earnings and margins, grow TSS and APM, and resolve legacy liabilities. They expect high return and high margin growth for the data immersion solution.
Despite the ongoing de-stocking in the TiO2 market, the company believes it is well-positioned for the market turnaround, noting green shoots in Asia Pacific inventory levels. The Chemours team remains focused on driving value for shareholders and addressing challenges in the industry.
InvestingPro Insights
Drawing from InvestingPro data, The Chemours Company has a market cap of 3510M USD and a P/E ratio of -11.44, indicating that the company has been operating at a loss. This is further reflected in the negative P/E ratio of -17.73 for the last twelve months as of Q3 2023. The company's revenue for the same period stands at 6004M USD, showing a decrease of 14.61%.
According to InvestingPro Tips, the company operates with a significant debt burden, and its revenue has been declining at an accelerating rate. Despite these challenges, the management has been aggressively buying back shares, indicating their confidence in the company's future prospects. The company's stock is also currently in oversold territory as per the RSI, suggesting potential for a price reversal.
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