BERWYN, Pa.—Lower sales volumes and weak market conditions have contributed to a drop in second quarter earnings (adjusted EBITDA) within Trinseo S.A.'s synthetic rubber unit.
Earnings within the unit fell to $13 million, representing a 57.8 percent drop when compared to the same period in 2018.
Meanwhile, sales within the unit fell 28 percent to $112 million in the three months to end of June, mainly due to currency impacts and lower sales volumes for SSBR and ESBR.
Volumes were down roughly 11 percent quarter-over-quarter, 18 percent year-over-year, as a result of weakness in the global tire market, Trinseo said in an Aug. 9 financial statement.
Frank Bozich, Trinseo president and CEO, said the decline in volumes reflected the decreases throughout the automotive industry.
"The global branded tire producers have been relatively flat, it's the commodity tire markets that have been hurt more significantly," he said said during a conference call.
The non-performance tire market, according to Bozich, is where Trinseo's ESBR technology would typically go.
The company's SSBR volume has been relatively stable and held up, as it is destined for performance tires, Bozich added.
"I'd say that we would see performance tires that utilize SSBR technology growing… much faster than the broader tire market in the future," he said.