- TREC’s total revenue grew by 9.6% to $68.1 million in Q2:18. Petrochemical revenues at South Hampton Resources (SHR) rose 9.9% to $57.8 million attributable to higher prices despite lower volumes. Trecora Chemicals (TC) sales rose $0.75 million.
- Gross profit fell to $8.1 vs. $11.1 million, as gross margin decreased to 12.0% in Q2:18 from 17.9% in the year earlier quarter. This was primarily the result rising feedstock costs not fully recovered in sales prices, and higher operating costs.
- Adjusted EBITDA (excluding equity in AMAK earnings/losses and share based compensation) decreased to $6.2 million in Q2:18 from $8.4 million in the year earlier quarter.
- Net Profit attributable to TREC in Q2:18 was $2.2 million or $0.09 per diluted share, compared with $0.8 million or $0.03 per diluted share in Q2:17. Adjusted net income (excl. AMAK equity profit in both years and one-time incentive compensation reversal this year) was $0.8 million or $0.03 per diluted share vs. $3.0 million or $0.12.
- We are lowering our EPS estimates for 2018 to $0.49 while raising our 2019 estimate to $0.86, and maintain our price target at $15.00 and our recommendation of BUY- Long Term.