Cabot reports double-digit declines in earnings, sales

Boston, Massachusetts – Cabot Corp. has reported double-digit declines in the sales and earnings (EBITDA) for its reinforcement materials segment in the first quarter of its 2020 financial year, started October 2019.

Earnings for the segment, which supplies rubber and speciality carbon blacks for the rubber & plastics industries, fell 24% year-on-year to $47 million (€43 million), Cabot announced 3 Feb.

Segment sales for the three months to end of December also dropped 17% to $379 million, due in part to lower sales volumes.

“Globally, volumes decreased 3% year over year as customers managed year-end inventories in Europe and the Americas,” said the Cabot statement. 

Lower volumes also resulted in lower energy centre revenue and a slower turn of inventory, both of which negatively impacted margins in the quarter.

In an earnings call on 4 Feb, Cabot CEO and president Sean Keohane said the company realised price increases in the Americas region while maintaining volumes.

“This is particularly important given the environmental capital investments we are making in the region to provide reliable supply for our customers,” he noted. 

In Europe, however, the current demand environment is softer, according to Keohane.

This is due to new carbon black supply from Russian producers which, according to the company official, “impacted the negotiations”.