Orion SA (NYSE:OEC)
$ 17.2 -0.35 (-1.99%) Market Cap: 992.79 Mil Enterprise Value: 1.93 Bil PE Ratio: 32.45 PB Ratio: 2.08 GF Score: 77/100

Q2 2024 Orion SA Earnings Call Transcript

Aug 02, 2024 / 12:30PM GMT
Release Date Price: $17.88 (-22.40%)

Key Points

Positve
  • Specialty business volumes improved by 17% year-over-year, indicating strong performance in this segment.
  • Pricing in the rubber segment is up year-on-year, with expectations for further gains in 2025.
  • Orion SA (OEC) plans to resume share repurchase activity, reflecting confidence in the company's valuation.
  • The company is making significant progress in sustainability, including producing carbon black from biocircular feedstocks and investing in tire recycling.
  • Orion SA (OEC) expects a positive outcome from the annual tire maker supply contract negotiations, driven by industry restructuring and potential tariff increases.
Negative
  • Q2 EBITDA was below expectations, leading to a revised 2024 guidance midpoint that is $25 million to $30 million lower than initially projected.
  • Lower-than-expected rubber segment volumes and adverse cogeneration significantly impacted financial performance.
  • The company faced higher maintenance costs and unplanned maintenance activities, which negatively affected EBITDA.
  • Rubber carbon black demand is soft in key markets due to consumer trade-down to lower-value brands and increased imports.
  • European power prices have been below expectations, further challenging the company's cogeneration contributions.
Operator

Greetings, and welcome to the Orion SA Q2 2024 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Kapsch, Vice President of Investor Relations. Thank you. You may begin.

Christopher Kapsch
Orion SA - Vice President, Investor Relations

Thank you, Sachi. Good morning, everyone, and welcome to Orion's conference call to discuss both second quarter 2024 results and to provide a midyear update on some strategic context, which we believe will be helpful for the investment community to consider.

This is Chris Kapsch, new to leading Orion Investor Relations efforts. I know many of you from prior roles and look forward to working with you in this new capacity. Joining our call today are Corning Painter, Orion's Chief Executive Officer; and Jeff Glajch, our Chief Financial Officer.

We issued our 2Q earnings after the close yesterday. We have posted a slide presentation to the Investor Relations portion of our website. We will be referencing this deck

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