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Linde plans additional share buybacks and further investments on higher earnings

August 02/2021

MOSCOW (MRC) -- US-German industrial gas producer Linde plans additional share buybacks and investments, particularly in electronics, after higher pricing and strong volumes across all its markets led it to hike its 2021 earnings guidance again on Friday, reported Reuters.

The world's leading supplier of oxygen to hospitals worldwide during the COVID-19 pandemic said it now expects 2021 adjusted earnings per share to rise 23-25% year-on-year, versus previous guidance for a 17-19% increase.

Chief Financial Officer Matthew White told a conference call following its second quarter earnings that Linde would continue to use excess cash for share buybacks and that the group's cash reserves would be higher next quarter.

Linde has consistently beaten analysts' quarterly estimates over the past two years, according to data compiled by Refinitiv.

Chief Operating Officer Sanjiv Lamba told the call the company was reviewing hundreds of prospective projects amounting to more than USD10 billion of potential investment, "including a significant number of electronics and clean energy projects."

Linde's electronics business, which brought in 10% of sales last year, has benefited from strong demand for consumer electronics under coronavirus lockdowns.

While the group's electronics and healthcare divisions remained strong in the second quarter, cyclical segments such as manufacturing, metals, and chemicals and refining all also saw double-digit growth. Industrial gas producers tend to have significantly lower exposure to economic fluctuations due to their long-term contracts, monthly fixed fees and rental income for cylinders.

The group's second-quarter adjusted earnings per share came in at USD2.70, above the USD2.54 forecast from analysts polled by Refinitiv, and beating its own guidance of USD2.50-USD2.55.

Linde had already hiked its 2021 earnings outlook in May, as a strong performance in its healthcare business helped it beat first-quarter forecasts.

As MRC informed earlier, in JUne 2021, SIBUR -Neftekhim and Linde Gas Rus signed agreements on implementation in 2021-2022. a project for the utilization of carbon dioxide (CO2) generated in the technological process of the SIBUR enterprise in Dzerzhinsk. SIBUR -Neftekhim will build an infrastructure for the transportation to the Linde Gas Rus site of crude CO2 obtained as a by-product in the process of ethylene oxide synthesis. In turn, Linde Gas Rus will build a unit to bring the quality of this gas to the level of a commercial product, applicable, among other things, in the food industry, and will sell it to end consumers.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
Author:Margaret Volkova
Tags:propylene, ethylene, petrochemistry, electrical goods, Sibur Holding, Linde Group, Germany, Russia, USA.
Category:General News
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