Cabot reports double-digit growth in reinforcement materials

Boston, Massachusetts – Cabot Corp. has reported a strong second quarter performance for its reinforcement materials segment, which includes the production and sale of rubber carbon blacks.

Over the three months to end of March, the unit saw sales increase 44% to $672 million, while earnings before interest and taxes (EBIT) rose 13.4% year-on-year to $101 million.

Cabot linked the increased earnings to improved unit margins from higher pricing in its calendar year 2022 customer agreements and higher volumes across all regions.

These gains were, however, partially offset by higher costs associated with utilities and maintenance.

In terms of volumes, the segment reported growth in all regions, led by Americas which saw a 6% increase year-on-year, followed by Europe, Middle East and Africa at 2% and Asia at 1%.

According to Cabot, the ongoing Russia-Ukraine war has not to-date materially impacted the US supplier, which does not have any operations in either country.

In Europe, said president and CEO Sean Keohane, the company is seeing "significant interest" from existing customers as well prospective buyers, "that are urgently looking for carbon black supply.

This is due to a ‘significant disruption’ in the supply of the carbon black materials in Europe, which imports a significant amount of the material from Russia, Keohane noted in a 3 May earnings call.

“As we go forward, we are trying to work with customers to help them in any way that we can, although, most of our capacity is contractually committed in Europe,” he added.

Cabot, said the CEO, is working with customers to help supply the materials from its global network, including in Asia and China ‘if the pricing and logistics make sense for them.’