Company: NGVT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001653477-25-000108
Chunk: 166

Company: Ingevity Corp
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 166
---
 interest rate swap, included a variable interest rate component. The weighted average interest rate associated with our variable interest rate borrowings was 5.69 percent for the period ended June 30, 2025. A hypothetical 100 basis point increase in the variable interest rate component of our borrowings for the six months ended June 30, 2025, would have increased our annual interest expense by approximately $4.8 million or seven percent. Comparatively, a 100 basis point increase in the variable interest rate component of our borrowings for the six months ended June 30, 2024, would have increased our annual interest expense by approximately $8.5 million or 10 percent.

Commodity price risk

A portion of our manufacturing costs includes purchased raw materials, which are commodities whose prices fluctuate as market supply and demand fundamentals change. Accordingly, product margins and the level of our profitability tend to fluctuate with the changes in these commodity prices. 

44

Crude tall oil price risk

Our results of operations are directly affected by the cost of our raw materials, particularly CTO, which, excluding CTO resales, represented 7 percent and 16 percent of our condensed consolidated cost of sales for the six months ended June 30, 2025 and 2024, respectively. Raw material CTO spend was approximately $8 million and $18 million during the three and six months ended June 30, 2025. Comparatively, total raw material CTO spend was approximately $55 million and $111 million during the three and six months ended June 30, 2024. Pricing for CTO is driven by the limited supply of the product and competing demands for its use, both of which drive pressure on its price. Our gross profit and margins have been and could continue to be adversely affected by increases in the cost of CTO if we are unable to pass the increases on to our customers. Based on average pricing during the three and six months ended June 30, 2025, a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO would have increased our cost of sales by approximately $0.8 million (zero percent) and $1.8 million (zero percent), respectively, which we may not have been able to pass on to our customers. Comparatively, based on average pricing during the three and six months ended June 30, 2024, a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO