Orion SA (OEC) Reports Mixed Q3 2023 Earnings, Records Higher Adjusted EBITDA
Orion SA (NYSE:OEC) reported net sales of $1,425.7 million for the first nine months of 2023, down $143.1 million year over year.
Net income for the same period was $98.6 million, up $4.6 million year over year.
Adjusted EBITDA for the nine months was a record $265.7 million, up 8% year over year.
Third quarter 2023 net sales were $466.2 million, down $76.9 million year over year.
Orion SA (NYSE:OEC), a specialty chemical company, announced its financial results for the periods ended September 30, 2023, on November 2, 2023. The company reported mixed results with a decrease in net sales but an increase in net income and record Adjusted EBITDA.
Financial Highlights
For the nine months ended September 30, 2023, Orion SA (NYSE:OEC) reported net sales of $1,425.7 million, a decrease of $143.1 million compared to the same period in the previous year. Despite the decrease in sales, the company's net income increased by $4.6 million to $98.6 million. The company also achieved a record Adjusted EBITDA of $265.7 million, up 8% year over year.
For the third quarter of 2023, the company reported net sales of $466.2 million, down $76.9 million year over year. Net income for the quarter was $26.2 million, down $5.6 million year over year. Adjusted EBITDA for the quarter was $77.3 million, down 4% year over year.
CEO Commentary
I am pleased to announce that we delivered $77 million of Adjusted EBITDA this quarter in the face of weak demand in many of our key markets. In addition, for the nine months, we achieved record adjusted diluted earnings per share up $0.06, to $1.76 from prior year," said Corning Painter, Orions chief executive officer.
Financial Analysis
The company's net sales decrease for both the nine months and third quarter was primarily driven by the pass-through effect of declining oil prices in both segments. However, this was partially offset by improved contractual pricing and favorable foreign exchange impact.
Despite the decrease in net sales, the company's net income increased for the nine months due to improved contractual pricing and a favorable product mix in the Rubber Carbon Black segment, partially offset by lower volume in both segments.
Looking ahead, the company is confident of delivering a third consecutive year of earnings growth, despite lower demand. The company is narrowing its 2023 Adjusted EBITDA guidance range to $330 million to $340 million, up seven percent at the midpoint, compared with its previous record 2022 results.
Debt and Outlook
As of September 30, 2023, the company's net debt was $756.5 million and EBITDA to debt ratio was 2.29 times. The company projects full year 2023 Adjusted EPS of $2.00 to $2.10, up nine percent at the midpoint. Free cash flow is expected to be approximately $100 million this year, and the company looks forward to further growth in 2024.
Explore the complete 8-K earnings release (here) from Orion SA for further details.
This article first appeared on GuruFocus.
