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Cabot swings to loss on collapse of automotive

August 10/2020

MOSCOW (MRC) -- Cabot Corporation (Boston, Massachusetts) reports a fiscal third-quarter net loss of USD6 million, down from income of USD32 million in the year-ago quarter, said Chemweek.

Net sales totaled USD518 million, down 39% year-over-year (YOY) from USD845 million. The company attributes the results to the sharp decline in the automotive and tire sectors. Adjusted earnings per share came to a 7-cent loss, down from profit of USD1.00 in the year-ago period, and short of the average analyst estimate of a 2-cent loss as compiled by Refinitiv (New York).

"Volumes and product mix across our businesses declined by over USD100 million in the third quarter as compared to the prior-year quarter, driven primarily by lower demand in the tire and automotive sectors as manufacturers temporarily halted production in response to the COVID-19 pandemic," says president and CEO Sean Keohane. УAs the quarter progressed, our customers slowly restarted operations during May and June. The sequential improvement in monthly reinforcement materials volumes through the quarter is a positive indicator that we are exiting the quarter in a stronger position than where we started."

Keohane expects the improving economic outlook and a recovery in the underlying automotive and replacement tire markets to drive a substantial improvement in volume and EBIT during the current quarter.

The reinforcement materials segment turned an EBIT loss of USD5 million, down from profit of USD72 million in the year-ago quarter, on sales of USD197 million, down 57% YOY from USD461 million. Globally, volumes decreased 42% year-over-year as the COVID-19 pandemic significantly impacted demand, says Cabot. The COVID-19 impact was most pronounced in both the Americas and EMEA as temporary customer shutdowns impacted volumes in both regions.

The performance chemicals segment turned in EBIT of USD21 million, down YOY from USD37 million, on sales of USD220 million, down 12% YOY from USD251 million. Cabot cites volume declines tied to COVID-19, a less favorable product mix in specialty carbons, and a more competitive pricing environment in fumed metal oxides.

The purification solutions turned in EBIT of USD2 million, up YOY from USD1 million, on sales of USD63 million, down 14% YOY from USD73 million. Cabot attributes the EBIT gain to higher margins from improved pricing and lower fixed costs.

As MRC informed earlier, Cabot (Boston, Massachusetts) apparently has to put restrictions in place, at least to a certain extent. The company says its coronavirus emergency plans have taken effect to ensure that only personnel critical to production are still working at its European and North American facilities.

As MRC informed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.

Cabot Corporation is an American specialty chemicals and performance materials company headquartered in Boston, Massachusetts. The company operates in over 20 countries with 36 manufacturing plants, eight research and development facilities and 28 sales offices.
Author:Anna Larionova
Tags:petroleum products, petrochemistry.
Category:General News
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