Linde has reported robust third-quarter 2024 results, including a 9% increase in adjusted earnings per share (EPS) to $3.94, despite challenging economic conditions. Driven by higher pricing and efficiency gains across segments, the industrial gas giant saw an adjusted operating profit rise of 7% year-over-year, reaching $2.5 billion.
The company’s sales for Q3 totalled $8.4bn, marking a modest 2% increase over the prior year. This growth was supported by a similar 2% rise in underlying sales driven by price improvements, though volumes remained flat across the board.
Sanjiv Lamba, Linde’s CEO, commented on the quarter’s performance. “As anticipated, weak economic trends persisted through the third quarter, most notably in the industrial end markets. However, Linde employees once again delivered high-quality results by growing EPS 9%, increasing ROC to 25.8%, and expanding operating margins by 130 basis points to 29.6%.”
Lamba also highlighted the company’s commitment to a disciplined investment strategy as it signed its largest-ever sale-of-gas project, boosting Linde’s project backlog to an all-time high of $10bn.
Operating profit for the quarter stood at $2.1bn, with an adjusted margin of 29.6%, a 130 basis-point increase from the previous year. Free cash flow also remained strong, rising to $1.7bn after capital expenditures. Linde returned $1.3bn to shareholders through dividends and stock buybacks during the period.
By regional breakdown, Linde’s Americas segment reported flat sales of $3.6bn compared to the previous year, driven by a 2% rise in pricing and a 1% increase in volumes from recent project start-ups. The Asia Pacific (APAC) region achieved a 5% rise in sales to $1.7bn, led by project-driven volume growth. In Europe, Middle East and Africa (EMEA), sales also remained stable year-over-year at $2.1bn, with pricing gains of 4% partially offset by softer volumes, particularly in the manufacturing sector.
The Linde Engineering segment demonstrated particularly strong growth, with sales up 31% year-over-year to $611 million. The segment’s operating profit reached $108m, supported by a third-party equipment backlog of $3.1bn, bolstered by order intake worth $491m.
Looking ahead, Linde forecasts adjusted EPS of $3.86 to $3.96 for Q4 2024, an 8-10% increase from the prior year’s quarter. The company maintains its full-year adjusted EPS guidance at $15.40 to $15.50, representing 9-10% growth year-over-year, excluding currency fluctuations.
Total capital expenditures for 2024 are expected to range between $4bn and $4.5bn, underpinning future growth and maintaining Linde’s sale-of-gas project backlog.
“Currently, we do not anticipate any near-term improvement in the economic environment. However, we have taken proactive actions to mitigate economic headwinds and remain well positioned to continue creating shareholder value,” Lamba added.
Global focus on new projects
Linde’s project portfolio continues to grow with recent high-impact investments aimed at supporting industries worldwide. In Indonesia, the company is investing $120m to construct the nation’s largest air separation unit (ASU) to support PT Freeport’s copper smelting facility in East Java. This ASU, slated for operation by 2025, will produce 2,000 tonnes of oxygen and nitrogen per day, crucial for PT Freeport’s smelting and refining operations.
Read more:Linde invests $120m in Indonesia’s largest ASU
In India, Linde has signed a long-term contract with Tata Steel to double its gas supply in response to Tata’s expanding production needs. This agreement includes constructing new ASUs that will add 1,450 tonnes of oxygen per day to Tata’s supply chain.
Read more:Linde secures long-term deal to double gas supply for Tata Steel’s expansion
Linde Engineering is also partnering with the Abu Dhabi National Oil Company (ADNOC) to equip its gas processing plant with carbon capture technology. This project, part of ADNOC’s decarbonisation efforts, will enable the capture of up to 1.9m tonnes of CO2 annually.
Read more:Linde Engineering to equip major ADNOC project with carbon capture tech
