Orion posts strong results as rubber black volumes decline

Luxembourg – Orion Engineered Carbons has seen a 4.8% year-on-year decline in its rubber carbon black production in the first quarter of 2017, largely due to a plant closure at Ambes, France in December last year.

In the three months to end of March, Orion said, volumes decreased 1.0% to 275.1 kilotonne per annum (ktpm), compared to the first quarter of 2016. Strong increase of 13.3% in speciality carbon blacks were offset by a decline in the rubber segment, the group added.

Revenue for the first three months of the year increased by €58.0 million to €304.3 million compared to the first quarter of 2016. This was largely due to sales price increases resulting from pass through of higher feedstock costs, foreign exchange translation effects and certain base price increases.

Net Income (profit) rose 18% to €15.8 million in the first quarter, with earnings (adjusted EBITDA) up 9% at €4.8 million.

In the rubber carbon black segment, volume dropped to 208.1 from 218.7 in the first quarter of 2017, as a result of the French closure. Revenue, however, rose 31% to €195.3 million with adjusted EBITDA up 36.6% to €26.7 million. The revenue increase, said Orion, was primarily due to the pass through of higher cost of feedstock to customers with index-pricing agreements and some price increases in certain regions.

“We are off to a good start with solid first quarter results that clearly demonstrate the complementary nature of our two carbon black businesses,” said Jack Clem, Orion’s chief executive officer.

"Our rubber carbon black volume was largely stable except for sales associated with the closure of our French facility which impacted volumes by 4.8% as we reduced marginally profitable grades produced in that facility,” added Clem.

According to the company's quarterly result statement, Orion’s facilities are “mostly” running at high operating rates, especially in the case of speciality grades and  higher grade technical rubber goods.