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Results decline for Orion Engineered Carbons in challenging first quarter
FINANCIALS
Bergamo-based company to offer enhanced security of supply on an exclusive basis to its European customers, it says. More information: www.sabo.com More information: www.e-ziko.com
FINANCIALS Nabaltec posts strong first quarter as growth continues into 2019
F
or the first quarter of 2019, Germany’s Nabaltec AG reported sales revenues of E48.5 million, up 7.3% from revenues of E45.2 million achieved in 1Q 2018, and another ‘record high’. Net earnings after tax were E3.5 million for the first three months of this year compared to a figure of E2.9 million for the same period a year earlier. The company’s EBITDA amounted to E9.0 million in 1Q 2019, up 23.3% compared to E7.3 million in the same quarter of the previous year, while operating profit (EBIT) came to E5.8 million in the reporting period, an increase of 34.9% from E4.3 million in 1Q 2018. The EBIT margin was 12.1% for the 2019 quarter. ‘With clear growth in revenues and earnings, we are once again off to a highly successful start this year’, says Nabaltec’s CEO Johannes Heckmann. The company looks forward to the remainder of the year ‘with optimism’, as demand in its traditional markets and applications has largely remained stable, he comments. Revenues in the Functional Fillers segment, which produces non-halogenated, aluminium hydroxide flame retardant fillers and functional additives for the plastics industry, totalled E32.5 million in 1Q 2019 compared to E29.3 million in the same period of last year, a rise of 10.9%. Quarterly EBITDA was E6.3 million while EBIT was E4.0 million this year, up from E4.7 million and E2.6 million, respectively, in 1Q 2018. Revenues in the Specialty Alumina product segment were E15.9 million in 1Q 2019, level with last year. Nabaltec reports that the expansion of its US operations is going to plan. Nashtec, located in Corpus Christi, TX, resumed production of aluminium hydroxide at the end of 2018 and during the first quarter began gradually
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Additives for Polymers
to assume responsibility for supplying overseas customers, with the expectation that it would meet this demand on its own from 2Q 2019. Work at the Naprotec plant in Chattanooga, TN [ADPO, August 2018, pp. 8–9], was also reported to be going to plan with output scheduled to ramp up gradually during 2H 2019. In time it will produce 30 000 tonnes/year of refined aluminium hydroxide products. The start-up of US production will take pressure off the Schwandorf facility, which has been operating at the limits of its capacity recently, the company notes. This will allow some space for growth in the Functional Fillers segment as well as the allocation of some capacity to boehmite or new applications, it says. ‘With quarterly revenues of E48.5 million, we are well within the target corridor of our forecast, which called for revenues of E190 million to E195 million for 2019 as a whole. We are confident that our growth will accelerate somewhat in the second quarter’, reports Günther Spitzer, CFO of Nabaltec. The company has therefore reaffirmed its forecast for the full year and expects an EBIT margin between 10.0% and 12.0%, assuming the economy remains stable. More information: www.nabaltec.de
Results decline for Orion Engineered Carbons in challenging first quarter
G
lobal carbon black supplier Orion Engineered Carbons reported net income of US$19.0 million on sales revenue of $384.7 million for the first quarter of 2019. A year earlier, the company posted net income of $26.8 million and revenue of $406.7 million. Orion attributes the declines largely to ‘suboptimal market conditions’. The company’s total sales volumes decreased by 8.2%, or 23 300 tonnes, compared to the previous year to 262 800 tonnes. Adjusted for plant consolidation in South Korea, volumes decreased by 4.0% year on year, reflecting weaker demand in both the speciality and rubber carbon black segments. This was largely due to a slowdown in demand in China and some rubber grades in Europe, Orion reports. Weakened demand, especially in the early part of the quarter, resulted in significant destocking of
August 2019
FINANCIALS
customer inventories in China as well as other regions, although the company notes that this trend has now slowed. Compared to 4Q 2018, volumes increased by 2.6%. The 5.4% year on year decline in revenue was primarily due to the volume decrease and foreign exchange translation effects, partially offset by price increases, particularly in the Rubber segment, and the pass through of higher feedstock costs. The revenue figure of $384.7 million was on a par with 4Q 2018. The company’s adjusted EBITDA decreased by $11.4 million, or 15.0%, from $76.0 million in 1Q 2018 to $64.6 million in 1Q 2019 but was roughly level with 4Q 2018. For Orion’s Specialty Carbon Black business, volumes fell by 7.4% to 64 000 tonnes in the first quarter of 2019 from 69 100 tonnes in 1Q 2018, mainly as a result of a slump in market demand in China during the first part of the quarter. However, volumes improved by 5.3% against the fourth quarter of 2018, particularly in Europe. The segment’s revenues decreased by $10.1 million, or 7.1%, year on year to $131.6 million in the first quarter of 2019, mainly due to lower volumes, negative foreign exchange rate translation effects and negative mix impacts, partially offset by base price increases. Adjusted EBITDA decreased by $10.9 million, or 27.1%, from $40.3 million in 1Q 2018 to $29.4 million this year. The corresponding adjusted EBITDA margin consequently fell by 620 basis points to 22.3%. The company’s Rubber Carbon Black business suffered an 8.4% decline in volumes to 198 800 tonnes in 1Q 2019, although when the consolidation of plants in South Korea is taken into account the volume decline was only 2.8%. The decrease was mainly attributable to reduced mechanical rubber goods volumes in China and to a lesser extent in Europe. On a sequential basis, volumes increased by 1.7% versus the fourth quarter of 2018. The segment’s revenue decreased by $11.9 million, or 4.5%, to $253.1 million in 1 Q 2019 ($265.0 million in 1Q 2018) primarily due to lower volumes and negative currency exchange effects, partially offset by the pass through of higher feedstock costs to customers and base price
August 2019
increases. Rubber adjusted EBITDA decreased by $0.5 million, or 1.4% year on year, to $35.2 million in the first quarter of 2019 reflecting the development of gross profit, partially offset by lower selling expenses. However, the adjusted EBITDA margin was up slightly to 13.9% in 1Q 2019 compared to 13.5% a year earlier. Despite the challenging start to the year, Orion saw some recovery in base volumes and premium grades towards the end of the first quarter as well as ‘more confident customer sentiment’, notes the company’s CEO Corning Painter. The modest volume recovery in the Specialty business is expected to continue, which will simultaneously improve mix, he says. This view is supported by ‘broader indications of a general recovery in China’, in part driven by government stimulus programmes and more constructive customer sentiment, he adds. According to Painter, the Rubber Black segment is making good progress in the China market. ‘We expect the modest volume recovery we have recently seen across both businesses, combined with cost, pricing and other key initiatives, will drive improved quarterly performance on a goforward basis’, he concludes. The company has also launched a profit improvement programme and continues to work on ‘pricing excellence’, Painter reports. In other company developments, Orion recently announced some major changes within its executive management team. As part of the restructuring operation, Carlos Quinones joins the company as senior VP global operations, tasked with strengthening plant productivity and reliability. In addition, Pedro Riveros has been appointed as senior VP and general manager, Americas, while Patrick Tuttle becomes senior VP global human resources. The new team members will be based in Orion’s principal executive offices in Houston. Furthermore, Claudine Mollenkopf, senior VP specialty carbon blacks, is leaving the company and her role will be reassigned within Orion. The company’s management team comprises 12 members led by CEO Corning Painter and CFO Charles Herlinger. Painter took up the CEO position last year on the retirement of Jack Clem [ADPO, October 2018, p. 11]. More information: www.orioncarbons.com
Additives for Polymers
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Bergamo-based company to offer enhanced security of supply on an exclusive basis to its European customers, it says. More information: www.sabo.com More information: www.e-ziko.com
FINANCIALS Nabaltec posts strong first quarter as growth continues into 2019
F
or the first quarter of 2019, Germany’s Nabaltec AG reported sales revenues of E48.5 million, up 7.3% from revenues of E45.2 million achieved in 1Q 2018, and another ‘record high’. Net earnings after tax were E3.5 million for the first three months of this year compared to a figure of E2.9 million for the same period a year earlier. The company’s EBITDA amounted to E9.0 million in 1Q 2019, up 23.3% compared to E7.3 million in the same quarter of the previous year, while operating profit (EBIT) came to E5.8 million in the reporting period, an increase of 34.9% from E4.3 million in 1Q 2018. The EBIT margin was 12.1% for the 2019 quarter. ‘With clear growth in revenues and earnings, we are once again off to a highly successful start this year’, says Nabaltec’s CEO Johannes Heckmann. The company looks forward to the remainder of the year ‘with optimism’, as demand in its traditional markets and applications has largely remained stable, he comments. Revenues in the Functional Fillers segment, which produces non-halogenated, aluminium hydroxide flame retardant fillers and functional additives for the plastics industry, totalled E32.5 million in 1Q 2019 compared to E29.3 million in the same period of last year, a rise of 10.9%. Quarterly EBITDA was E6.3 million while EBIT was E4.0 million this year, up from E4.7 million and E2.6 million, respectively, in 1Q 2018. Revenues in the Specialty Alumina product segment were E15.9 million in 1Q 2019, level with last year. Nabaltec reports that the expansion of its US operations is going to plan. Nashtec, located in Corpus Christi, TX, resumed production of aluminium hydroxide at the end of 2018 and during the first quarter began gradually
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Additives for Polymers
to assume responsibility for supplying overseas customers, with the expectation that it would meet this demand on its own from 2Q 2019. Work at the Naprotec plant in Chattanooga, TN [ADPO, August 2018, pp. 8–9], was also reported to be going to plan with output scheduled to ramp up gradually during 2H 2019. In time it will produce 30 000 tonnes/year of refined aluminium hydroxide products. The start-up of US production will take pressure off the Schwandorf facility, which has been operating at the limits of its capacity recently, the company notes. This will allow some space for growth in the Functional Fillers segment as well as the allocation of some capacity to boehmite or new applications, it says. ‘With quarterly revenues of E48.5 million, we are well within the target corridor of our forecast, which called for revenues of E190 million to E195 million for 2019 as a whole. We are confident that our growth will accelerate somewhat in the second quarter’, reports Günther Spitzer, CFO of Nabaltec. The company has therefore reaffirmed its forecast for the full year and expects an EBIT margin between 10.0% and 12.0%, assuming the economy remains stable. More information: www.nabaltec.de
Results decline for Orion Engineered Carbons in challenging first quarter
G
lobal carbon black supplier Orion Engineered Carbons reported net income of US$19.0 million on sales revenue of $384.7 million for the first quarter of 2019. A year earlier, the company posted net income of $26.8 million and revenue of $406.7 million. Orion attributes the declines largely to ‘suboptimal market conditions’. The company’s total sales volumes decreased by 8.2%, or 23 300 tonnes, compared to the previous year to 262 800 tonnes. Adjusted for plant consolidation in South Korea, volumes decreased by 4.0% year on year, reflecting weaker demand in both the speciality and rubber carbon black segments. This was largely due to a slowdown in demand in China and some rubber grades in Europe, Orion reports. Weakened demand, especially in the early part of the quarter, resulted in significant destocking of
August 2019
FINANCIALS
customer inventories in China as well as other regions, although the company notes that this trend has now slowed. Compared to 4Q 2018, volumes increased by 2.6%. The 5.4% year on year decline in revenue was primarily due to the volume decrease and foreign exchange translation effects, partially offset by price increases, particularly in the Rubber segment, and the pass through of higher feedstock costs. The revenue figure of $384.7 million was on a par with 4Q 2018. The company’s adjusted EBITDA decreased by $11.4 million, or 15.0%, from $76.0 million in 1Q 2018 to $64.6 million in 1Q 2019 but was roughly level with 4Q 2018. For Orion’s Specialty Carbon Black business, volumes fell by 7.4% to 64 000 tonnes in the first quarter of 2019 from 69 100 tonnes in 1Q 2018, mainly as a result of a slump in market demand in China during the first part of the quarter. However, volumes improved by 5.3% against the fourth quarter of 2018, particularly in Europe. The segment’s revenues decreased by $10.1 million, or 7.1%, year on year to $131.6 million in the first quarter of 2019, mainly due to lower volumes, negative foreign exchange rate translation effects and negative mix impacts, partially offset by base price increases. Adjusted EBITDA decreased by $10.9 million, or 27.1%, from $40.3 million in 1Q 2018 to $29.4 million this year. The corresponding adjusted EBITDA margin consequently fell by 620 basis points to 22.3%. The company’s Rubber Carbon Black business suffered an 8.4% decline in volumes to 198 800 tonnes in 1Q 2019, although when the consolidation of plants in South Korea is taken into account the volume decline was only 2.8%. The decrease was mainly attributable to reduced mechanical rubber goods volumes in China and to a lesser extent in Europe. On a sequential basis, volumes increased by 1.7% versus the fourth quarter of 2018. The segment’s revenue decreased by $11.9 million, or 4.5%, to $253.1 million in 1 Q 2019 ($265.0 million in 1Q 2018) primarily due to lower volumes and negative currency exchange effects, partially offset by the pass through of higher feedstock costs to customers and base price
August 2019
increases. Rubber adjusted EBITDA decreased by $0.5 million, or 1.4% year on year, to $35.2 million in the first quarter of 2019 reflecting the development of gross profit, partially offset by lower selling expenses. However, the adjusted EBITDA margin was up slightly to 13.9% in 1Q 2019 compared to 13.5% a year earlier. Despite the challenging start to the year, Orion saw some recovery in base volumes and premium grades towards the end of the first quarter as well as ‘more confident customer sentiment’, notes the company’s CEO Corning Painter. The modest volume recovery in the Specialty business is expected to continue, which will simultaneously improve mix, he says. This view is supported by ‘broader indications of a general recovery in China’, in part driven by government stimulus programmes and more constructive customer sentiment, he adds. According to Painter, the Rubber Black segment is making good progress in the China market. ‘We expect the modest volume recovery we have recently seen across both businesses, combined with cost, pricing and other key initiatives, will drive improved quarterly performance on a goforward basis’, he concludes. The company has also launched a profit improvement programme and continues to work on ‘pricing excellence’, Painter reports. In other company developments, Orion recently announced some major changes within its executive management team. As part of the restructuring operation, Carlos Quinones joins the company as senior VP global operations, tasked with strengthening plant productivity and reliability. In addition, Pedro Riveros has been appointed as senior VP and general manager, Americas, while Patrick Tuttle becomes senior VP global human resources. The new team members will be based in Orion’s principal executive offices in Houston. Furthermore, Claudine Mollenkopf, senior VP specialty carbon blacks, is leaving the company and her role will be reassigned within Orion. The company’s management team comprises 12 members led by CEO Corning Painter and CFO Charles Herlinger. Painter took up the CEO position last year on the retirement of Jack Clem [ADPO, October 2018, p. 11]. More information: www.orioncarbons.com
Additives for Polymers
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