Orion rubber black earnings up 30% despite fourth quarter dip

Houston, Texas – Orion Engineered Carbons SA has seen its rubber carbon black business grow over 2021, despite fourth quarter supply chain headwinds.

The segment posted adjusted earnings (EBITDA) of $120.0 million (€105 million), up 33% compared to 2020, as revenue increased 37% to $949 million, Orion announced 18 Feb. 

The segment accounted for 61.3% of the company’s total revenue and 44.7% of total adjusted earnings, according to the carbon black maker.

Volumes grew 10.4% year-on-year to 701 kilotonnes, accounting for more than 72% of the company’s total volume in 2021.

Orion linked the higher annual sales to the passing-through of higher feedstock costs as well as higher volume due to "sharp global recovery" from Covid-induced economic downturn. 

Gross profit of the segment increased by $45.4 million, or 31.6%, from $143.6 million in 2020 to $189.0 million in 2021, primarily driven by passing-through of higher feedstock costs, and higher demand. 

Over the fourth quarter, the segment’s volumes declined by 9.1 kmt, or 5.3%, year over year, reflecting lower demand, supply chain issues and planned plant turnarounds.

Quarterly sales increased 30.2% to $245.1 million, due mainly to the impact of passing through higher feedstock costs, partially offset by lower volume, and impact of unfavourable product mix.

Adjusted earnings for the quarter fell 18.5% $22.0 million driven by lower volume, impact of unfavourable product mix and "higher incentive compensation."

“While our full year performance was exceptional, fourth quarter [overall] adjusted EBITDA was $52.3 million, down 20.8%,” said CEO Corning Painter. 

The decline, he said, reflected lower volume impacted by the company’s emissions controls start-up in Ivanhoe and other planned turnarounds as well as supply chain disruptions.