Cabot reports strong Q2, sees increased interest from European customers

BOSTON—Cabot Corp. has reported strong quarter-two performance for its reinforcement materials segment, which includes the production and sale of rubber carbon blacks.

Over the three months to ending March 31, the unit saw sales increase 44 percent to $627 million, while earnings before interest and taxes (EBIT) rose 13.4 percent year-on-year to $101 million.

Cabot linked the increased earnings to improved unit margins from higher pricing in its calendar year 2022 customer agreements and higher volumes across all regions.

These gains were, however, partially offset by higher costs associated with utilities and maintenance.

In terms of volumes, the segment reported growth in all regions, led by Americas, which saw a 6-percent increase year-on-year; followed by Europe, Middle East and Africa at 2 percen; and Asia at 1 percent.

According to Cabot, Russia's ongoing war in Ukraine has not materially impacted the U.S. supplier to date, which does not have any operations in either country.

In Europe, said President and CEO Sean Keohane, the company is seeing "significant interest" from existing customers as well prospective buyers, "that are urgently looking for carbon black supply."

This is due to a "significant disruption" in the supply of the carbon black materials in Europe, which imports a significant amount of the material from Russia, Keohane noted in a May 3 earnings call.

"As we go forward, we are trying to work with customers to help them in any way that we can; although, most of our capacity is contractually committed in Europe," he added.

Cabot, said the CEO, is working with customers to help supply the materials from its global network, including in Asia and China "if the pricing and logistics make sense for them."