Bekaert grows rubber reinforcement earnings despite sales dip

Brussels - Bekaert’s Rubber Reinforcement business has reported higher earnings despite an 8.3% year-on-year decline in consolidated third-party sales, to €1,030 million in the first half of 2023.

The revenue decline, Bekaert stated 28 July, reflected the pass-on of wire rod price decreases, only partially offset by a 2.5% increase in volumes.

Sales decreased in all regions, however volumes “recovered strongly” in China albeit at lower price points, according to the Belgian group’s financial results statement.

In terms of earnings, Bekaert linked a 4.0% increase in ‘underlying’ EBIT (uEBIT) to its “focus on operating costs and pricing discipline”, which offset the impact of lower sales.

The reported uEBIT figure of €105 million represented an underlying EBITDA margin of 14.5%, compared with 13.0% in the first six months of 2022.

Sales at Bekaert’s Rubber Reinforcement joint venture in Brazil fell 28.7% year-on-year to €101 million, on lower volumes and the impact of passing-on lower raw material costs.

Including joint ventures, the Rubber Reinforcement business unit’s combined first half sales came in 9.6% lower year-on-year at €1,119 million, the group also reported.

Reviewing market prospects, Bekaert forecast a recovery in demand seen in China since April to continue into the second half of 2023.

However, noted the group, “other markets including Europe and North America have been and will continue to be weaker.”

More positively, Bekaert said south east Asia, including India, was “showing strong growth potential and the ramp-up of our Vietnam plant is progressing well with the first customer acceptances.

“Overall there remains significant market interest in Rubber Reinforcement’s premium products and sustainable solutions, such as recycled steel tire cord applications.”