Sector News

Air Products earnings slip on COVID-19 impacts, but narrowly beat estimates

July 28, 2020
Energy & Chemical Value Chain

Air Products today reported net income down 9% year on year (YOY), to $446.5 million, on sales down 7% YOY, to $2.07 billion.

Adjusted earnings fell 7% YOY, to $2.01/share, slightly ahead of analysts’ consensus estimate of $1.99/share, as reported by Refinitiv (New York, New York). COVID-19 reduced earnings by 35–40 cents/share, with a 3% YOY drop in volumes partly offset by a 2% increase in prices and cost cuts.

“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 megaprojects in Saudi Arabia and Indonesia which together represent planned Air Products investment of approximately $5.7 billion,” says Air Products chairman and CEO Seifi Ghasemi.

Americas segment sales declined 11% YOY, to $850 million, while segment adjusted EBITDA was roughly flat, at $411 million. Volumes fell by 5% YOY, largely due to lower merchant volumes on COVID-19, and energy pass-through was down 6%. Selling prices rose 2% YOY, boosting margins.

Asia segment sales fell 4% YOY, to $652 million, while segment adjusted EBITDA declined 2%, to $327 million. Volumes fell 3% YOY on COVID-19 impacts and maintenance outages at certain plants. Pricing grew 2% YOY, although margins declined.

EMEA segment sales decreased 13% YOY, to $430 million, while segment adjusted EBITDA was down 11%, to $170 million. Volumes declined 7% YOY due to lower merchant demand on COVID-19, and energy pass-through declined 6%. Prices grew by 3% YOY, although margins still fell.

By: Vincent Valk

Source: Chemical Week

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