Air Liquide bets on US energy transition as investments hit record 4 billion euros
Reuters
Published Oct 25, 2023 06:22
Updated Oct 25, 2023 17:28
By Andrey Sychev and Tristan Veyet
(Reuters) -Air Liquide's investment backlog hit a record 4.2 billion euros ($4.44 billion) in the third quarter, the French industrial gases firm said on Wednesday, eyeing growth opportunities coming from the U.S. energy transition in the future.
" Air Liquide (EPA:AIRP) will be a key player in the hydrogen development across the U.S.," Chief Executive Francois Jackow said during a post-earnings call.
In the next 12 months, the firm is considering spending 3.4 billion euros on investments, with about half of them in the energy transition field, including in the United States.
Air Liquide, one of the largest hydrogen producers in the world, is seen as a beneficiary of the global energy transition, supported by the U.S. Inflation Reduction Act(IRA) and the EU's net-zero emissions programme.
U.S. HYDROGEN HUBS WIN
The French traditional company with 60 years of experience in hydrogen production, was chosen as a partner for six out of seven planned clean hydrogen hubs by the U.S. Department of Energy (DoE), which will allocate $7 billion for the projects within the bipartisan infrastructure law.
The hubs would connect future hydrogen plants, customers, and local energy infrastructure, and are set to be the basis for the country's future clean energy network.
Deutsche Bank (ETR:DBKGn) analysts estimate that thanks to the project, Air Liquide would be exposed to up to $16 billion of private investment.
This might potentially bring up about 264 million euros from tax returns to earnings by end-2024 already, as per Deutsche's calculations, with any profit from the hubs' operation five years away.
THIRD-QUARTER RESULTS
The firm has confirmed its annual outlook in its third-quarter earnings release. "In 2023, Air Liquide is confident in its ability to further increase its operating margin and to deliver recurring net profit growth, at constant exchange rates," Jackow said in a statement.
The company's sales rose 1.5% on comparable basis (excluding energy and currency effects) reaching 6.81 billion euros by the end of September, which was in line with Vara Research analysts' forecast.
Including changes in energy prices and currency, sales dropped 17.4% annually. Energy prices fell year-on-year after spiking following the Russian invasion of Ukraine, while the euro strengthened to the U.S. dollar in the July-September quarter.
Get The App
Air Liquide passes energy costs to customers by automatically including them in contracts, which especially hits its energy-intensive large industries customers, namely metal and chemical companies.
($1 = 0.9459 euros)
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.