Q3 2020 performance drives cash generation, significant net debt reduction: Tenneco

Tenneco, the parent company of shock absorber specialist, Monroe Australia, has released its latest financial results.

The US-based company reported a revenue of $4.3 billion USD, down 2.0 per cent versus the prior year.

Value-add revenue for the third quarter 2020 was $3.3 billion USD versus $3.5 billion USD in the prior year.

Tenneco reported a net loss of $499 million USD, while adjusted net income was $27 million USD.

Q3 2020 EBIT improved to $236 million USD versus $148 million USD in the prior year.

Adjusted EBITDA was $388 million USD, up $1 million USD versus the prior year.

Earnings performance was reported to be driven by operating performance and enhanced contribution from structural and temporary cost savings.

Cash generated from operations of $486 million USD was primarily driven by strong earnings resiliency, effective working capital management and a return to more normalised levels for factoring. Disciplined capital spending also benefitted performance.

“Our third quarter results demonstrate the effectiveness of our operational execution as we leveraged Tenneco’s global scale and diversified portfolio to deliver strong cash flow performance and year-over-year margin expansion in the face of the prolonged impact of the Covid pandemic,” said Tenneco CEO, Brian Kesseler. “My thanks to our global team members for their strong execution and commitment to continuous improvement.”

Total debt of $5.8 billion USD improved by $1.1 billion USD compared to Q2 2020 due to the pay down of the revolving credit facility. Net debt of $5.1 billion USD improved $429 million USD compared to the second quarter 2020, and was $123 million USD lower than the prior year.

Liquidity increased to $1.8 billion USD at 30 September 2020, consisting of total cash balances of $721 million USD and undrawn revolving credit facility availability of $1.1 billion USD, compared to liquidity of $1.4 billion USD on 30 June 2020.

“The health of our global team members and the safe operation of our facilities remain our top priorities, and we continue to promote healthy behaviours both inside and outside the workplace,” said Kesseler. “Our Accelerate program is delivering structural cost savings as planned and contributing to improved cash flow and margins, positioning Tenneco to finish 2020 strong with positive momentum.”

Tenneco is among the world’s leading designers, manufacturers and marketers of automotive and commercial vehicle products for original equipment and aftermarket customers, with 2019 revenues of $17.5 billion USD and approximately 78,000 team members working at more than 300 sites worldwide.