Linde plans additional share buybacks and further investments on higher earnings

Linde plans additional share buybacks and further investments on higher earnings

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.
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Lubrizol to raise its TPU production capacity with multi-million dollar investment

Lubrizol to raise its TPU production capacity with multi-million dollar investment

MOSCOW (MRC) -- Lubrizol has announced the next phase of its staged, multi-million dollar investment in thermoplastic polyurethane (TPU) capacity and capabilities to serve the rapidly growing global Paint Protection Films (PPF) market, according to Indian CHEMICAL News.

This comes on top of investments of over USD20 million over the last three years in capacity, application and testing capabilities, and market insights.

The new investments will further optimize the global manufacturing footprint to support expected growth and innovation in the PPF market, with progressive capacity increases through debottlenecking and greenfield investments that will more than triple capacity over the next three years.

“The PPF market shows continued strong growth across the globe, driven by increased consumer awareness and the desire to protect vehicles surfaces and maintain premium aesthetics,” said Viviana Wilson, global director industrial marketing of ESTANE Engineered Polymers for Lubrizol. “Consumer preferences in PPF are well aligned with the long-lasting performance and protection enabled by the use of ESTANE TPU from Lubrizol. Across the world, we’re channeling our resources and capabilities to help end-users benefit from high performance surface protection solutions.”

As MRC informed earler, more than 5,250 tons of chemicals, oil and fuel additives burned in a massive fire at US specialty chemical firm Lubrizol in Rouen, France, in late September, 2019. Lubrizol managed to resume operations at its plant at Rouen in northwest France after the fire only in late December, 2019.

The Lubrizol Corporation, a Berkshire Hathaway company, is an innovative specialty chemical company that apart from its production develops and supplies technologies to customers in the global transportation, industrial and consumer markets. Lubrizol is providing innovative solutions for its customers high-performance application needs and remains committed to ongoing investment in its CPVC capabilities that support future growth. With headquarters in Wickliffe, Ohio, Lubrizol owns and operates manufacturing facilities in 17 countries, as well as sales and technical offices around the world. Founded in 1928, Lubrizol has approximately 8,000 employees worldwide.
MRC

Valero Q2 operating income fell 72%

Valero Q2 operating income fell 72%

MOSCOW (MRC) -- Valero Energy Corp said its adjusted profit rose in the second quarter from the previous three-month period, as fuel consumption improved with the easing of coronavirus-related travel restrictions, said Hydrocarbonprocessing.

Adjusted net income attributable to Valero stockholders was USD197 million, or 48 cents per share, for the three months ended June 30, compared with USD140 million, or 34 cents per share, in the prior quarter.
Valero's Q2 operating income fell 72% year on year as sales growth was outpaced by an increase in total cost of sales.

In the refining segment, Valero reported operating income of USD349m, compared with USD1.8bn for Q2 2020. “Our system’s flexibility and the team’s relentless focus on optimisation in a weak, but otherwise improving, margin environment enabled us to deliver positive earnings in the second quarter,” said CEO Joe Gorder.

In its renewable diesel segment, Valero reported USD248m of operating income, up from USD129m in Q2 2020, and in the ethanol segment it reported USD99m of operating income, up from USD91m from Q2 2020. Valero continues to expand capacity at its Diamond Green Diesel (DGD) joint venture with Darling Ingredients to produce renewable diesel, it said.

At St Charles, Louisiana, a new plant, DGD 2, is expected to increase renewable diesel production capacity by 400m gal/year. The expansion project remains on budget and on track to be completed and operational in the middle of the fourth quarter of 2021, Valero said. It will also provide the capability to market 30m gal/year of renewable naphtha into low-carbon fuel markets.

Also, a new plant, DGD 3, at Port Arthur, Texas, which is expected to increase renewable diesel production capacity by 470m gal/year, is progressing well and is now expected to commence operations in the first half of 2023, the company said. DGD 3 will raise DGD’s total annual production capacity to about 1.2bn gallons of renewable diesel and 50m gallons of renewable naphtha.

As per MRC, Valero Energy Corp, the second largest U.S. crude oil refiner, plans to operate its 14 refineries up to 89% of their combined total throughput capacity of 3.15 million barrels per day (bpd) during the second quarter of 2021, a company executive said. Valero’s U.S. Gulf Coast refineries are planned to operate up 92% of their combined total throughput of 1.86 million bpd.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

Top energy companies in Europe signalled confidence in a lasting recovery from the pandemic impact

Top energy companies in Europe signalled confidence in a lasting recovery from the pandemic impact

MOSCOW (MRC) -- Europe's top energy companies signalled confidence in a lasting recovery from the pandemic impact by drawing on higher oil prices to boost shareholder returns and reassure investors as they roll out risky climate strategies, said Hydrocarbonprocessing.

After swiftly cutting spending and jobs in response to the unprecedented collapse in energy demand last year, executives from Royal Dutch Shell, TotalEnergies and Norway's Equinor were eager to highlight the rapid reversal in fortunes. "We wanted to be really clear and signal to the market the confidence that we have in our prospects and our cash flows," Chief Executive Ben van Beurden said on Thursday, after Shell launched a $2 billion buyback programme and boosted its dividend for a second consecutive quarter, a year after cutting it for the first time since the 1940s.

Energy companies have come under heavy pressure from climate campaigners, governments and shareholders to speed up the shift from fossil fuels to cleaner sources. While some investors welcome the change as they perceive carbon-intensive, fossil fuel energy as unsustainable, others are worried about the implications for profit margins of new business models.

Benchmark Brent crude oil prices more than doubled in the second quarter from a year earlier to around USD69 a barrel, driven by recovering demand and tightening global supplies. As profits surged, France's TotalEnergies also announced on Thursday plans to buy back shares. CEO Patrick Pouyanne said however that a large increase in dividends would not be reasonable yet and would be linked to higher cash flow.

The group said it expected to generate more than USD25 billion in cash flow this year, based on current high oil price forecasts, and would invest in more new projects and return surplus amounts to shareholders if oil prices remained high. Equinor also said on Wednesday it would begin a long-planned share buyback that will reach USD300 million by the end of the third quarter after profits surged.

BP reports its second quarter results on Aug. 3. It launched a USD500 million buyback in the previous quarter after halving its dividend last year.

As per MRC, Shell agreed to sell its stake in eastern German refinery PCK Schwedt, the latest in a string of refinery disposals as part of the Anglo-Dutch company's energy transition strategy. Shell said in a statement that it will sell its 37.5% share in the refinery for an undisclosed sum to Vienna-based Alcmene GmbH, part of the Liwathon Group, an integrated logistics and investment business headquartered in Estonia. The deal is expected to close in the second half of 2021, pending approval by cartel authorities and its partners, Russia's Rosneft and Italy's Eni.

As MRC informed earlier, Royal Dutch Shell closed the FCC unit at its Deer Park, TX facility on 18 July due to a fire. It is not known how long this facility will be closed with a capacity of 340,000 barrels per day and 90,000 tonnes of propylene per year.

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.
MRC

Indian Oil Corp plans 100% crude processing within a quarter

Indian Oil Corp plans 100% crude processing within a quarter

MOSCOW (MRC) -- Indian Oil Corp (IOC) said it was operating its refineries at 90% capacity as diesel sales were yet to reach pre-COVID-19 levels, but it expects to ramp up refining to full capacity within a quarter as demand picks up, said Reuters.

Indian state fuel retailers’ gasoline sales exceeded pre-pandemic levels in the first fortnight of July, as motorists took back to the roads after states eased COVID-19-related lockdowns. Even as a second wave of COVID-19 infections battered the country during April and May, this year’s lockdown restrictions were not as severe as compared to last year, with most states allowing some vehicular movement.

Still, Indian refiners had reduced crude processing during the quarter and curtailed oil purchases amid higher fuel inventories. Diesel sales are still at around 85%-90% of pre-COVID-19 levels and are expected recover by the festival of Diwali in November, Chairman S.M. Vaidya said in a press conference, adding that the refinery runs are also expected to be at 100% capacity by then.

Higher fuel prices also sapped consumption, with India’s tax-heavy retail prices of gasoline and gasoil touching record highs due to a surge in global crude oil prices. International Brent prices jumped about 18% during the June quarter.
The state-owned company had reported a net profit of 59.41 billion rupees ($798.92 million) in the quarter ending June 30, compared with a profit of 19.11 billion rupees a year earlier, when lockdowns due to the COVID-19 pandemic hammered fuel demand and squeezed margins.

Revenue from operations soared 74.3% to 1.55 trillion rupees in the quarter. Indian Oil also said it has extended its joint venture partnership with Malaysia’s Petronas for the retail sale of diesel and gasoline, but it did not divulge more details. IOC, along with its unit Chennai Petroleum, controls about a third of India’s five million-barrels-per-day refining capacity.

Meanwhile, as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world's third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

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.

Indian Oil Corporation (IOC) is an Indian state-owned oil and gas corporation headquartered in New Delhi.
MRC