Asset writedown contributes to Cabot's net loss for 12 months to September.

Boston, Massachussetts -- For the fiscal year ended 30 Sept., 30, 2005, Cabot Corp. reported a loss of $41 million compared with earnings of $124 million for fiscal year 2004. The 2005 figure included $183 million of after tax charges for some exceptional items and discontinued operations, compared with $14 million for fiscal year 2004. These charges related to Cabot's supermetals business area, where the company re-evaluated many of its assets, reducing the book value by some $110 million.

For the full fiscal year, profitability in the carbon black unit decreased $22 million when compared to fiscal year 2004. The carbon black business was adversely affected during the fourth quarter by the rise in feedstock and other energy costs, the increased costs associated with its LIFO accounting methodology in North America, and the effects of the hurricanes on the gulf coast. As a result of these issues, carbon black reported a decrease of $20 million in operating profits in the quarter compared to the fourth quarter of fiscal year 2004 and a $31 million decrease compared to the third quarter of fiscal year 2005.

The carbon black business increased its volume year over year by roughly 4% driven by its rapidly growing business in China and other developing markets as well as increased volumes from its long-term tire contracts. The business was able to significantly reduce its inventory during the fourth quarter of fiscal 2005, which adversely impacted profitability but positively impacted cash flow.