Houston, Texas – Orion Engineered Carbons has withdrawn its full-year 2020 guidance and is looking to increase cash flow in response to the ongoing uncertainty over the Covid-19 crisis, the company announced 23 March.
In its earnings presentation in February, Orion said it expected the outbreak to only impact its first quarter results.
At the time the carbon black supplier said it anticipated to deliver a “modest growth” in earnings to $250-280 million (€230-258 million) over the full year.
In its statement 23 March, Orion said it was withdrawing the guidance as uncertainty was growing over “the duration, magnitude and geographic reach of Covid-19,” and due to the likely impact of the the outbreak on its business over the long term.
The company is to provide an update on the estimated financial impacts of Covid-19 during its first quarter earnings conference call in May.
The carbon black maker also unveiled several ‘proactive measures’ to maintain and strengthen its financial flexibility, including increasing its cash position and suspending dividend payments as of end of March.
Orion’s previously announced interim dividend of $0.20 per common share will be paid on 31 March to holders of record as of the close of business on 10 March, as planned.
“Given the now global economic uncertainty Covid-19 has created, our ability to accurately predict the financial impact to Orion is limited,” said CEO Corning Painter.
The company, Painter said, is facing the uncertainty with “sound balance sheet, attractive debt maturity profile and substantial liquidity to withstand this economic downturn.”