DOVER, Del. (AP) — The CEO of Wilmington-based Chemours is predicting profitability in future quarters as the company stabilizes following its spinoff from DuPont.
Chemours, the former performance chemicals unit of Dupont, has posted losses in three out of four quarters since becoming an independent company.
Chemours this week reported a second-quarter loss of $18 million, or 10 cents a share, which equals the $18 million loss for the corresponding period last year, the final quarter before completion of the spinoff.
Chemours chief Mark Vergnano said Tuesday he was pleased with the progress Chemours has made as a stand-alone business, and that it is on track with its post-spinoff transformation plan, including cutting costs and reducing an initial debt load of $4 billion.
"We are right on track with every aspect of that plan," he said.
Vergnano also dismissed speculation that DuPont spun off its debt-laden unit last year with the idea that it would wind up in bankruptcy, allowing DuPont an opportunity to shed hundreds of millions in environmental liabilities.
"That was never, ever discussed or thought.... It was never imagined that that would be the goal of this company," said Vergnano, a former DuPont executive vice president who took over the performance chemicalsunit in 2009.
In June, Chemours issued a statement refuting a report by Citron Research, led by activist short-seller Andrew Left, describing the company as "a bankruptcy waiting to happen."
In its report, Citron cited Chemours' heavy debt load and potential exposure to hundreds of millions of dollars in liabilities related to PFOA, also known as C-8, a processing aid that was used in the production of Teflon.
An Ohio federal is overseeing some 3,500 lawsuits involving alleged health problems related to exposure to PFOA. While DuPont is the named defendant in each case, it claims it is entitled to indemnification from Chemours for any damages. Two of those cases have gone to trial, with the defendants being awarded $1.6 million and $5.6 million in damages, respectively.
Chemours says both verdicts are being appealed, and that it is continuing discussions with DuPont regarding potential indemnification claims.
"We continue to talk and work with DuPont.... We'll use all of our defenses from the standpoint of indemnity," Vergnano said.
While Chemours is currently focused on operating cash flow, Vergnano said he expects at some point that it will begin focusing on earnings.
The second quarter earnings results included impairment charges of $63 million, interest expense of $50 million and restructuring costs of $9 million. The company said adjusted net income totaled $49 million, or 27 cents per share.
Vergnano said Chemours is hoping to build on its leading market positions in titanium dioxide, a whitening pigment used in a variety of industrial applications and consumer products, and in fluoroproducts such as its environmentally friendly Opteon refrigerants.
"The whole intention of this company is to get itself very healthy so we can grow faster than the market," he said.
Chemours shares closed at $10.30 Tuesday, up 10.6 percent.