HOUSTON—Orion S.A.'s carbon black unit posted a reverse in earnings despite slightly higher volumes during the quarter ended March 31.
First-quarter adjusted earnings (EBITDA) fell 10.0 percent year-on-year to $57.4 million, on 2-percent lower sales of $332 million, Orion reported May 2.
Segment volume increased by 4.600 KMT, or 2.5 percent year-on-year on higher demand in the Europe, Middle East, Africa (EMEA) and Asia-Pacific regions.
Orion linked the decline in sales to "the pass-through effect of declining oil prices, partially offset by higher volume."
Adjusted earnings decreased primarily due to "favorable timing items in the prior year" as well as lower volumes in the North American rubber segment.
Furthermore, lower cogeneration pricing in Europe took a toll on earnings despite this factor being partially offset by higher EMEA and Asian volumes.
Rubber gross profit margins stood at $435/metric ton, "well above last year's average of $409/ton" but 6.9 percent lower than the same quarter last year.
"Prior to 2022, our rubber gross profit margins typically ran in the $200 to $300 per ton range," noted Orion CEO Corning Painter.
The latest figure, said Painter, showed that "key markets continue to restructure and this is the 'new normal' from which we can build."
According to the company leader, this trend was signaled by the announcements of three planned new tire factories in "the first quarter alone."
Looking ahead, Painter said "for planning purposes, we are assuming the current soft economic growth conditions continue throughout 2024."