US industrial gases and LNG company Air Products sees quarterly sales fall but still above $2Bln mark

Friday, 24 July 2020
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Air Products, the largest US LNG and industrial gas company, said fiscal third-quarter net income declined by 9 percent to $457 million, primarily reflecting the negative impacts from Covid-19.

The company also attributed the fall to a prior year gain, partially offset by pricing actions and charges as well as LNG project execution.

Third-quarter sales were 7 percent lower than a year ago at $2.1 billion due to 4 percent lower energy pass-through, 3 percent lower volumes and 2 percent unfavorable currency, partially offset by 2 percent higher pricing.

The LeHigh Valley, Pennsylvania-based company said the estimated Covid-19 impact on sales was 9 percent, primarily due to volume impacts in the Americas and European merchant businesses.

The company said the impact was partially offset by positive volume contributions from new plants and LNG activities without giving details.

Air Products conducts its industrial gases business alongside its provision of LNG equipment products such as the main cryogenic heat exchangers for plants and its proprietary propane pre-cooled mixed refrigerant liquefaction process.

Most of the worldwide LNG production comes from Air Products technology. The company provides key equipment for the natural gas liquefaction process for large export plants, small and mid-sized plants and floating LNG facilities.

“As the world continues to navigate challenging conditions related to Covid-19, I am very proud of the Air Products team who have demonstrated their true character and commitment in keeping our plants running and our customers supplied with essential products,” said Chairman, President and Chief Executive Seifi Ghasemi.

“Meanwhile our onsite business - which represents more than half of our sales - remains stable, and we continued to execute on our growth strategy, announcing two new mega-projects in Saudi Arabia and Indonesia which together represent planned Air Products investment of approximately $5.7Bln,” stated Ghasemi.

The sales in the Industrial Gases-Americas division fell by 11 percent to $850 million. This was due to 6 percent lower energy pass-through and 5 percent lower volumes.
Operating income of $248M was down 5 percent, primarily due to the lower volumes.

In Industrial Gases-Europe, the Middle East and Africa sales were posted of $430M, a fall of 13 percent in the same prior-year quarter.

This was mainly due to 7 percent lower volumes and lower merchant demand impacts. Operating income came to $105M, down 15 percent.

Industrial Gases-Asia reported sales of $652M, down 4 percent, driven in part by 3 percent unfavorable currency. The division’s operating income came to $222M. down 4 percent.

Chairman Ghasemi said that there was still significant uncertainty in the global economy and the Covid-19 recovery was showing mixed results around the world.

“Despite these challenges, we have shown that with our stable business model, financial position, significant growth opportunities and the total commitment of our people, we can and will continue creating value for shareholders over the long term,” he concluded.

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