Orion sees carbon black earnings up 33 percent

HOUSTON—Orion Engineered Carbons S.A. has seen its rubber carbon black business grow over 2021, despite fourth quarter supply chain headwinds.

The segment posted adjusted earnings (EBITDA) of $120 million, up 33 percent compared to 2020, as revenue increased 37 percent to $949 million, Orion announced Feb. 18.

The segment accounted for 61.3 percent of the company's total revenue and 44.7 percent of total adjusted earnings, according to the carbon black maker.

Volumes grew 10.4 percent year-on-year to 701,000 metric tons, accounting for more than 72 percent of the company's total volume in 2021.

Orion linked the higher annual sales to the passing-through of higher feedstock costs as well as higher volume due to "sharp global recovery" from COVID-19-induced economic downturn.

Gross profit of the segment increased by $45.4 million, or 31.6 percent, from $143.6 million in 2020 to $189 million in 2021, primarily driven by passing-through of higher feedstock costs, and higher demand.

Over the fourth quarter, the segment's volumes declined by 9.1 kmt, or 5.3 percent, year over year, reflecting lower demand, supply chain issues and planned plant turnarounds.

Quarterly sales increased 30.2 percent to $245.1 million, due mainly to the impact of passing through higher feedstock costs, partially offset by lower volume, and impact of unfavorable product mix.

Adjusted earnings for the quarter fell 18.5 percent to $22. million driven by lower volume, impact of unfavorable product mix and "higher incentive compensation."

"While our full year performance was exceptional, fourth quarter (overall) adjusted EBITDA was $52.3 million, down 20.8 percent," said CEO Corning Painter.

The decline, he said, reflected lower volume impacted by the company's emissions controls start-up in Ivanhoe and other planned turnarounds as well as supply chain disruptions.