Boston, Massachusetts – Cabot Corp. is optimistic about its “growth runway” as the economic recovery continues to strengthen globally, according to president and CEO Sean Keohane.
The group’s reinforcement materials segment, which includes tire and rubber carbon blacks, posted earnings (EBITDA) of $105 million (€87 million) for the three months to end of December 2020 – 64% above the prior-year figure.
Sales for the final quarter fell 1% year-on-year to $375 million, despite a slight increase in volumes, Cabot officials also reported in a 2 Feb first quarter presentation.
CFO Erica McLaughlin attributed the higher earnings to “improved pricing and product mix” as well as 2020 tire customer agreements and spot-market trends in Asia.
“This improvement included our ability to raise prices ahead of rising feedstock costs in Asia that drove strong unit margins,” she commented.
Globally, volumes were up 1% in the first quarter, primarily due to a 13% growth in Europe and 9% higher volumes in the Americas.
McLaughlin linked the volume hike to a continued recovery in key end-market demand as well as “some level of inventory replenishment from the draw-downs earlier in the calendar year.”
Asia volumes were down 8% year-over-year, largely due to a scheduled plant turnaround and the company’s decision to balance pricing and volumes in order to improve margin levels, she added.
For his part, Keohane said the recovery momentum in the tire and automotive markets continued during the quarter, with a “sharp rebound” off the lows experienced last spring.
According to Cabot’s president and CEO, miles-driven trends and automotive-production figures have improved, while still generally lagging pre-Covid levels.
“With both end markets still below prior peaks, we are optimistic about our growth runway as the economic recovery strengthens,” he concluded.