ERJ staff report (DS)
Boston, Massachusetts -- Cabot Corp announced higher sales, but lower earnings for the 12 months ended 30 Sept, 2008. The company's rubber blacks business saw margins increase in the fourth quarter, compared with the rest of the year, but the contract-lag effect hit earnings for the full year. Carbon black sales into the rubber industry grew by 32 percent on higher prices, to $1868 million for the 12 months. profit increased by about 9 percent, to $101 million (from $93 million).
In the final quarter of the year, Cabot said volumes shipped declined in all markets around the world. "Volumes declined by 7 percent driven by economic softness in all regions as our tyre customers reduced production on weaker demand. The Americas declined by 10 percent, with North America down 7 percent and South America down 15 percent; the Europe, Middle East, Africa region was down 6 percent; and Asia Pacific was down 6 percent overall, with China down 16 percent, in part due to the Olympics, more than offsetting an increase of 3 percent in the rest of Asia."
For the year as a whole, Cabot said volumes were flat. Patrick Prevost, Cabot's President and CEO, said that the coming year would see a positive time-lag effect, in which contract prices of carbon black will fall, but delayed compared with input prices, resulting in a positive flow of cash, instead of the negative effect seen in 2008. Prevost said the Company's rubber blacks supply contracts had an unfavorable impact of $36 million and $66 million for the fourth quarter and full fiscal year 2008, respectively. This is compared to an unfavorable impact of $13 million and $6 million in the same periods of 2007.
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Press release from Cabot