Tronox Slows Pigment Output After Price Drop
Tronox Ltd. (TROX), the U.S pigment maker that emerged from bankruptcy last year, slowed production after ore costs rose and prices declined in Europe and the Asia- Pacific region. The company also announced a share buyback.
The biggest factor in the “softness” in pigment demand is concern about the economic slowdown in Europe and China, Stamford, Connecticut-based Tronox said today in a statement. Earnings before interest, taxes, depreciation and amortization in the second quarter will be about 20 percent less than first- quarter Ebitda of about $151 million, Tronox said.
Tronox will repurchase as many as 2.5 million shares. The buyback will begin as soon as is “practical,” Tronox Chairman and Chief Executive Officer Tom Casey said in the statement. The company will also pay a $1.25-a-share dividend to shareholders of record at the close of trading on July 13. Tronox will carry out a 5-to-1 stock split on July 20.
“While we have considered issuing a special dividend as a way to return capital to shareholders, we believe our stock is undervalued at the present trading levels,” Casey said.
Tronox dropped 2 percent to $122 at 9:47 a.m. in New York.
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