LNG

Chart Industries, the US LNG equipment maker, has reported mid-second quarter business activities, including new contracts and expenditure and cash flow details at its four divisions.

Chart said that net cash provided by operating activities for continuing operations amounted to $15.5 million and corresponding free cash flow included capital expenditures of $12.6M, driven by strong earnings, cash collections and supplier terms extensions.

The Atlanta-based company, listed on the Nasdaq global exchange, also completed a five-year long-term agreement with a major industrial gas customer for field services and repairs.

Chart said it signed an agreement with Risco Energy Solutions to provide LNG equipment to support the rapidly growing gas-to-power infrastructure in the Asian nation of Indonesia.

“April earnings per share and adjusted earnings per share after adding back severance costs were very strong, as our non-energy related businesses have continued to perform,” stated Jill Evanko, Chart’s President and Chief Executive.

“While the pandemic has altered 2020 for everyone, we are focused on shaping our business to deliver good results in 2020 and position Chart to take advantage of the strong fundamentals of the clean energy transition,” she added.

It also booked orders with 67 new customers in April and May and executed $11.9M of additional cost reductions on May 29, 2020, bringing year-to-date total annualized cost reductions to $60.7M.

“While the current economic situation continues to be challenging for our oil-related product lines, we continue to see demand for our equipment and solutions related to the transition to clean energy infrastructure and our specialty markets,” said Chart.

“With over $60M of cost reductions taken year-to-date, we continue to expect margin expansion throughout 2020 and strong free cash flow for the year, with debt paydown a priority,” it added.

Company free cash flow in April 2020 amounted to $12.6M.

“In the past two months, we have achieved payment term extensions with 311 suppliers with an average payment term extension of 38 days (new payment terms for those suppliers average 89 days)’” stated Chart.

The company second quarter orders through May 29 totaled about $135M, with orders in-house that will be booked in the first days of June totaling an additional $14M.

“In April and May, we received orders from 67 new customers, including 20 in China, where quarter-to-date orders and sales have exceeded our original 2020 plan,” stated the company.

Chart additionally reported demand for oxygen-related critical care products was strong in the month of April and in the first two weeks of May, while activity for traditional industrial gas applications has increased in the second half of May as the hyper-focus on oxygen delivery has subsided to pre-COVID-19 levels.

“We continue to see consistent and strong quoting and order levels for fueling stations, repair and service, small-scale LNG infrastructure and specialty markets, including the receipt of a $2.3M order for a European country’s Armed Forces,” the company revealed.

“We also expect to receive a small-scale terminal order in North America in June 2020,” it added.

In the E&C Cryogenics division, demand for quick turn refurbishment, repair and service-related product and services has increased over the past eight weeks, with orders of $7.2M associated with this type of work.

“Venture Global’s Calcasieu Pass big LNG project continues on schedule, and in May, we booked an additional $1M order related to the project,” said the company.

Chart said that areas that softened in the first two months of the second quarter 2020 included HLNG vehicle tanks, beverage tanks, and air-cooled heat exchangers.

“Air cooled heat exchanger orders quarter-to-date total $12.1M while the fans business continues to book and ship consistent with first quarter levels,” said the company.

Chart noted that the support of governments for the transition to clean energy fuels has heightened, with India extending excise duties on diesel, and Germany expected to extend the toll exemption for LNG heavy duty trucks on German highways in early June which will continue to incentivize companies to build infrastructure, including LNG fueling stations and additional over-the-road LNG trucks.

The company has also previously announced a letter of intent from Shell for 7 fueling stations in Germany and in May 2020, received the first purchase order for 2 of the 7 stations plus a surprise four station order that has not yet been booked from another customer.

Chart said that other regions, in particular Southeast Asia, continue to address their need for power infrastructure.

“One such country is Indonesia, and early in the second quarter 2020, we signed an agreement with Risco Energy Solutions, a private investment company, to provide LNG equipment such as Storage Tanks, ISO containers, Trailers, Mobile Equipment, and Fueling Stations, to support the rapidly growing Indonesian gas-to-power infrastructure needs,” it said.
Risco is an active gas infrastructure provider to PT Perta Gas Niaga, a subsidiary of the oil and gas company Pertamina.

“Given the weak demand for air-cooled heat exchangers and the continued optimization of our cost structure, we took further reductions on May 29, 2020,” said Chart.

The total cost reductions taken equaled $11.9M in annualized cost savings, bringing the year-to-date total to $60.7M of annualized cost savings.

“Of the $60.7M, approximately $51M are structural changes that can be maintained at volume levels above $1.6 billion,” the company stated.

Intercontinental Exchange Inc., the US-based operator of regulated trading platforms for commodity and financial markets, reported multiple records in oil and natural gas futures trading as well as in its corporate earnings, giving it the “strongest quarter in the company’s history.”

ICE reported record revenues as daily volumes trading in energy futures and options surged during March in contracts such as the US benchmark West Texas Intermediate crude oil, North Sea Brent and natural gas.

The Atlanta, Georgia-based company recorded multiple records across the crude oil, natural gas and fuel product futures markets.

These derivatives are purchased and sold by parties such traders, oil and gas companies and utilities as hedges against rises and falls in physical resource prices.

Platform operator ICE reported that there were record futures and options trading across all types of financial derivatives.

Futures and options trading in the first quarter was up 45 percent year-on-year, driven by record volumes across all asset classes with average daily volume (ADV) records broken and energy trading up 54 percent, agri and metals up 31 percent and interest-rates instruments 28 percent higher.

The high volumes continued into April with energy open interest (OI) contracts still 23 percent higher versus 2019, including Brent crude up 27 percent, natural gas up 28 percent and other crude and refined products up 33 percent.

Despite the turmoil, ICE said that the New York Stock Exchange listed 15 initial public offerings during the first quarter, helping its customers raise over $7 billion in IPO proceeds.

For the quarter ended March 31, ICE said its consolidated net income was $650 million on $1.6 billion of revenues, less transaction-based expenses.

The revenues were 23 percent higher than in the first quarter of 2019.

“Amidst these highly uncertain times, we are grateful for both our customers’ business and their trust,” said Jeffrey C. Sprecher, ICE Chairman and Chief Executive.

“The dedication of our employees and our focus on leading technology is what provides the foundation for our global markets to operate smoothly in times of stress,” added the CEO.

“This combination enabled us to generate the strongest quarter in our company’s history, reporting record revenues and double-digit earnings per share growth,” explained Sprecher.

“As we look to the balance of the year, our focus remains on the safety of our employees, while also continuing to ensure that our markets, clearinghouses and related data services perform to the highest possible standards,” stated Specher.

Scott A. Hill, ICE Chief Financial Officer, said that in the first quarter the company recorded mutiple records, which enabled the firm to return over $850 to stockholders through its dividend and stock buyback program.

ICE’s data and listings revenues in the quarter were $676M and trading and clearing net revenues were $883M.

“This performance also enabled us to continue to invest in our business, ensuring we can continue to provide our customers with critical risk management tools while also creating value for our stockholders,” stated Hill.

Chart Industries, the US supplier of equipment for the industrial gas, energy and liquefied natural gas sectors, also supplies medical oxygen for critical care and had to increase production by over 50 percent to meet continued demand for COVID-19 patients.

This was in addition to lining up LNG fuel products for Royal Dutch Shell and securing its biggest ever industrial gases sale in China.

“All Chart manufacturing locations globally have been deemed essential business by each local and federal government and therefore continue to operate under this status,” said the company in its first-quarter earnings report.

“During March 2020, we increased production on specific medical oxygen related products by over 65 percent in the US and 50 percent in the Czech Republic,” added the Atlanta, Georgia-based Chart.

Additionally, Chart stated that orders for its cryobiological product line used for storage and transport of vaccinations, cell therapy and biological inventory increased by 14 percent to $20.8 million in the first quarter of 2020 when compared to the first quarter of 2019. 

“Typically, my quote would be about the financials and decisive, agile responsiveness during this unprecedented time,” said Chart Chief Executive Jill Evanko.

“The related facts in this release contain that information, but I would like to thank our team members who, as essential personnel, have worked tirelessly and safely to increase production on critical care products that are being used globally to save lives,” stated the CEO.

In its core LNG and industrial gases business Chart’s order backlog of $733M was flat compared with the first quarter of 2019, which included $135M of equipment for US developer Venture Global’s Calcasieu Pass LNG project.

Excluding Calcasieu Pass, backlog increased 6.8 percent year on year.

There was a first-quarter order backlog of $151M for the Distribution & Storage Western Hemisphere division, up 18.7 percent and its highest ever.

Overall, first-quarter orders amounted to $304.3M and were 34 percent less than the prior-year quarter.

The first quarter of 2019 had included the Venture Global Calcasieu Pass order ($135M), Golar’s floating “LNG Gimi” tanker conversion project ($20M) and Niche LNG’s small-scale LNG work ($7M).

In the second of its four divisions, Distribution & Storage Eastern Hemisphere, Chart booked 14 LNG fueling stations, which is the same level as the first quarter 2019.

“Additionally, in April we received verbal commitment from Shell for the supply of seven LNG fueling stations,” said Chart.

“Our teams are currently working toward a multiyear long-term contract whereby Shell will place the order for up to four stations in the second quarter of 2020 and three more in 2021,” the company added.

“The multiyear agreement will allow for expansion of these quantities with privileged support to Shell’s business plans and strategy for LNG in Europe,” stated Chart.

Chart said backlog in China was $68M at the end of the first quarter and subsequently the company received its largest industrial gas order in its history from China in early April, though gave no details.

Chart also received a letter of intent for process technology and associated equipment for Eagle LNG’s Jacksonville project in Florida.

Industrial plant orders of $4.7M were received by its Energy & Chemicals Cryogenics division for retrofitting a refinery with air cooled heat-exchangers.

Chart’s fourth division, called E&C FinFans, recorded its highest orders in the first quarter compared with the previous three quarters, including $23M in the month of March.

“This is specific to air coolers, and we expect fans products to continue to grow year-over-year,” said Chart.

Chart Industries, the US liquefied natural gas and industrial gases equipment supplier, has signed a letter of cooperation with ExxonMobil India LNG Ltd, an affiliate of the US  major, and Indian Oil Corp. to focus on delivering LNG by Indian roads, railroads and waterways to spread gas use in the absence of physical pipelines.

Chart Industries, the maker of equipment for the liquefied natural gas and industrial gas industries, and Energy Capital Vietnam, a southeast Asian-focused asset management firm, have signed an accord to promote the distribution of liquefied natural gas within Vietnam with Chart as the supplier of downstream equipment.

Chart Industries, the maker of equipment for the liquefied natural gas and industrial gas industries, posted a surge in revenues as it benefited from orders across all sectors from large liquefaction plants to small-scale LNG while benefiting from contributions from its acquisitions.

The US Elba Island LNG export plant in the state of Georgia has become the sixth US export facility to come on stream after the US Federal Energy Regulatory Commission gave owner Kinder Morgan permission to place the first liquefaction Train into service.

Chart Industries, the US LNG and industrial gases equipment provider, has agreed to acquire Harsco Corp.’s Industrial Air-X-Changers business for $592 million in cash as it makes its fourth acquisition in two years to broaden its sector offerings.

Chart Industries, the manufacturer of engineered equipment for the industrial gas and energy industries, announced the release of the updated version of its liquefied natural gas processing technology.

Chart Industries, the US liquefied natural gas equipment-maker and supplier to the liquid gas sector, said it would be ramping up manufacturing to meet new LNG project orders on the Gulf Coast and in Asia, while more business is expected in trucking and rail transportation of the fuel.