MOSCOW (MRC) -- Linde reported a strong fourth-quarter as "solid operating leverage" from higher prices and cost savings offset modest volume gains, according to Chemweek.
The company reported fourth-quarter adjusted income from continuing operations of USD1.0 billion, up 22% year on year (YOY) on higher price and margin improvement. Sales were USD7.1 billion up 1% YOY; volumes were also up 1%. Excluding currency impact, sales for the quarter were up 3% YOY.
Reported earnings were USD1.89/share up 25% YOY and 4 cents/share above consensus estimates as reported by Zacks Investment Research.
Linde expects full-year 2020 earnings per share (EPS) in the range of USD8.00–8.25, up 10–13% YOY excluding currency impacts. "Looking ahead to 2020, we anticipate continued softening of macroeconomic conditions, but project double-digit EPS growth from our industry-leading backlog and continued efforts to optimize the business," says Linde CEO Steve Angel.
Americas segment operating profit was USD676 million in the fourth quarter, up 11% YOY. Segment sales were USD2.7 billion, up 2%. Volume gains were led by "the resilient end markets of healthcare, food, and beverage," Linde says.
Europe, Middle East, and Africa segment operating profit was USD353 million, up 19% YOY. Sales of USD1.7 billion were down 3% YOY. Excluding unfavorable currency and cost pass-through, sales increased 1%. Pricing was 3% higher but partially offset by negative volumes primarily due to weaker manufacturing activity, Linde says.
Asia Pacific segment operating profit was USD299 million, up 22%. Segment sales of USD1.4 billion were down 3% YOY. Sales were flat versus prior year excluding negative currency and cost pass-through. Price increased 2% but was offset by negative volumes driven by weaker economic conditions in South Pacific, lower electronics end market activity, and higher sale of equipment in the prior year, Linde says.
Engineering segment operating profit was USD93 million, up 21% YOY. Sales were USD770 million, up 8%. Operating profit grew due to strong project execution, productivity and better cost absorption, Linde says.
Linde also set out updated sustainability goals, including plans to lower its greenhouse gas emissions intensity 35% by 2028. Linde says it will invest at least USD1 billion in decarbonization projects and spend one-third of R&D budget on decarbonization initiatives through 2028. Linde also plans to double its purchase of renewable power by 2028.
As MRC wrote previously, in H1 February 2020, Linde PLC commissioned a new air separation unit (ASU) in Freeport, Texas, as part of a long-term agreement to supply MEGlobal Americas Inc.’s new monoethylene glycol (MEG) plant at Oyster Creek petrochemical complex in Freeport. The new ASU will supply oxygen and nitrogen to MEGlobal Oyster Creek for use in its MEG manufacturing process. The ASU also will supply Linde’s industrial gas pipeline system, adding new argon capacity, Linde said.
We remind that MEGlobal Americas officially began production at its 750,000 ton per year MEG plant in October last year to meet the growing demand for ethylene glycol products in the US and Asia-Pacific markets, as well as its strategy to expand globally.
MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).
According to MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia decreased by 16% year on year in December 2019. Russia's overall estimated PET consumption totalled 696,810 tonnes in 2019, up by 1% year on year (690,130 tonnes in 2018).
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