Cabot's financial report reveals that profit of carbon black for rubber increased by 23% year-on-year

Recently, Cabot Company of the United States announced its performance report, revealing the profitability of its reinforcing materials business unit (focusing on carbon black for rubber and engineering elastomer composites E2C) in the third quarter of this year. The report pointed out that the quarter ended September 30 was the last fiscal quarter of the company's fiscal year, in which profit after interest and tax (EBIT) of rubber carbon black reached US$134 million (approximately RMB 956 million), an increase of 23% over the same period last year.

Cabot said that this significant profit increase was mainly due to supply agreements reached with customers during 2023, which included higher prices and a better product portfolio, which boosted profit margins. It is understood that during this fiscal quarter, the promotion of the Chinese market increased sales of rubber carbon black in Asia by 3%, which partially offset the 7% decline in sales in the Americas, Europe, Middle East and Africa (EMEA) region.

Throughout fiscal year 2023, Cabot's rubber carbon black business unit achieved revenue of US$482 million (approximately RMB 3.430 billion), an increase of 18% compared with fiscal year 2022, while its sales were 2.500 billion US dollars (approximately RMB 17.795 billion), a year-on-year decrease of 4%. Company President and CEO Sean Mr. Keohane is optimistic about the outlook for fiscal year 2024, expecting business volume to achieve "lower single digit" growth, and expects to further improve performance by increasing pricing and improving product portfolio.

When evaluating the performance of the reinforcing materials division, Mr. Kerchamp emphasized the "record performance" and attributed it to the company's "localized supply model." He pointed out that rising geopolitical tensions have put pressure on global supply chains, highlighting the importance of supply security. He also mentioned that the improvement in the company's performance over the past eight years has been due to the long-term growth in demand for the rubber carbon black business in the replacement tire market and the tight balance of supply and demand in mature markets.

At the same time, Corchamp emphasized the impact of increasingly stringent environmental regulations on companies, especially "significant investment in emissions reduction" in sustainable supply. These investments not only increase barriers to entry for additional production capacity, but also nearly double costs that need to be recouped through price increases. Because of these factors, he believes the prospects of Cakabot's rubber carbon black business are supported by "favorable long-term demand drivers and growing demand for innovation."