Orion rubber black earnings up 51% despite dip in sales

Houston, Texas – Orion Engineered Carbons has seen earnings (EBITDA) in its rubber carbon black segment increase significantly year-on-year, due mainly to contractual price increases.

Segment volume for the second quarter of 2023 declined by more than 9% year-over-year to 192 kilotonnes due to the global economy slowdown.

Sales for the three months to end of June fell by 14% to $309 million (€280 million), primarily due to the lower volumes and oil price movements.

Improved contractual base-price helped partially offset the losses, according to Orion's second quarter report, issued 9 Aug.

Adjusted earnings rose 51% year-on-year to $57.4 million, driven by contractual base-price improvement, which resulted in improved gross-profit margins.

The gains were, however, partially offset by lower volume and decreased cogeneration revenue, the company reported.

Volume-decrease, noted Orion, was mainly due to “destocking and deferment” in the Europe, Middle East and Africa region as well as the Americas.

Looking ahead, Orion said it remained confident of delivering a “record year”, despite some softness in end-markets.

“We are now setting our 2023 adjusted EBITDA guidance range to be $320 million to $350 million, up 7% at the midpoint, compared with our record 2022 results,” said CEO Corning Painter.

The carbon black major, added Painter, is “on track” to realise its 2025 goal of a 'mid-cycle adjusted earnings capacity' of $500 million.