Cabot's functional reinforcing materials division achieves record high performance in fiscal year 2023

Cabot Corporation (code: CBT), listed on the New York Stock Exchange, recently announced its fourth quarter and full-year financial results for fiscal 2023. In a challenging fiscal year, the company's financial performance remained strong, particularly in the functional reinforcement materials division.

Cabot's President and CEO Co., Ltd. said that despite challenges such as declining market demand, unfavorable environment in the Chinese market and customer destocking behavior, the company has achieved solid profit margins in the fiscal year 2023 through strict cost management and effective commercial execution. Corchamp also mentioned that the company has made significant progress in the field of sustainable development, especially the launch of the EVOLVE® Sustainable Solutions Technology Platform, which provides customers with more sustainable product options.

Business reports for the fourth quarter of fiscal 2023 show that the performance of the functional reinforcement materials division and the high-performance materials division is very different. During the fiscal quarter, the functional reinforcing materials division achieved a significant increase in EBITDA of US$25 million compared to the same period in fiscal 2022. The main driving force for this growth comes from the company's more optimized pricing strategy and product portfolio adjustments. Although sales in the Americas and Europe, Middle East and Africa (EMEA) declined, causing overall sales to decrease by 2%, sales growth in the Asian market, especially in China, effectively mitigated the impact of the decline.

In contrast, the performance of the high-performance materials division was unsatisfactory in the same quarter. The division's EBITDA fell $13 million from the previous fiscal year. Analyzing the reasons, this is mainly due to the poor product mix of the specialty carbon black and fumed metal oxide product lines and the reduction in unit profit. In addition, the department is also facing greater pressure on pricing, especially for the gaseous phase metal oxide and battery material product lines. It is understood that although sales of specialty carbon black, specialty polymers and battery materials product lines have increased, this only partially offset the decline in sales of the fumed metal oxide and inkjet paste product lines, which has a slight negative impact on the overall profit of the department.

Looking forward to fiscal year 2024, Coshanne expects that with the continued growth of the functional reinforcing materials business, the company's adjusted earnings per share will reach US$6.30 to US$6.80. He also emphasized that the company will continue to focus on generating cash flow and adopt a balanced capital allocation strategy, especially for investments in battery materials projects. Cochamp concluded: "We firmly believe that this year's investment has laid a solid foundation for future growth, and we thank the global team for their efforts, allowing the company to demonstrate strong resilience in a complex macroeconomic environment."