Sales up 47% in the second quarter, with continued volume growth in Americas and Europe
Houston, Texas – Orion Engineered Carbons saw its black rubber revenues decline slightly in the second quarter as labor and administrative costs continued to rise.
The US carbon black supplier reported a 3.8% year-on-year decline in second-quarter adjusted profit (EBITDA) to $39 million (€38 million), on sales up 47% at $360 million.
Segment volumes increased 9.5 kilotons, or 5.2%, year-over-year, reflecting higher demand in Americas and Europe, the Middle East and Africa, Orion reported on August 4.
Orion linked the increase in sales primarily to the pass-through of higher raw material costs, pricing, higher volume and a favorable product mix.
These, he said, were partially offset by the impact of unfavorable foreign currency translation and the strength of the dollar.
Lower earnings were also attributable to the $2.5 million impact of unfavorable foreign currency translation and $11.5 million higher labor costs, lower stockpiling and maintenance.
“The second half of 2022 will be busy for us,” said CEO Corning Painter commenting on the outlook for the year.
The company, he said, is “on track” to complete air emissions control work in Borger, Texas, as well as the mechanical phase of the green factory in Huaibei, China.
Additionally, Orion is nearing completion of “a significant debottlenecking project” and is working to move European reactors away from natural gas combustion.
“We co-generate electricity and/or provide district heating at all of our European sites that use natural gas, so there are good reasons for us to be exempt from the reductions,” he said.
Nonetheless, he continued, Orion is “working hard” to meet the voluntary 15% natural gas reduction target promoted by the EU.
Orion confirmed its adjusted earnings range of $310 million to $340 million for the year.