Delivering its ninth consecutive quarter of double-digit adjusted revenue growth in its latest financial results, Air Products has completed its 2016 earnings on a high.
Citing recent project wins in the US and Korea, progress on the Jazan project in the Middle East and the spin-off of its Electronics Materials Division and Performance Materials Division as highlights behind its success, the US-based business posted a quarterly revenue increase of 16% versus the prior year.
It reported a total net income from continuing operations of $402m with fourth quarter sales inching up to $2.46bn – a 1% increase from the previous fiscal year. Air Products attributed this growth to a surge of 3% in volumes, primarily driven by the Jazan project, which more than offset lower energy pass-through and unfavourable currency impacts.
Sales in its Industrial Gases – Global business unit almost doubled in the fourth quarter, rising from $68m the prior year to $157m in this fiscal quarter. The significant improvement was linked to fourth quarter sales of $113m and profits associated with the Jazan project once again.
Broken down into business segments, however, fourth quarter results were mixed for Air Products, with sales struggling in both the Americas and Europe, Middle East and Africa (EMEA) regions, whilst sales in Asia flourished.
“We continue to be very optimistic about the long-term growth opportunities for our focused industrial gases business”
Seifi Ghasemi, Chairman, President and CEO
Sales in its Industrial Gases – Americas segment of $877m decreased by 3% on lower volumes, whilst volumes were down in Latin America by almost 10%. Despite this negatively impacting overall Americas volumes by 2%, Air Products recorded a segment operating income of $225m – an 8% increase over the prior year.
Sales in its Industrial Gases – EMEA unit also took a hit, declining by 10% to settle at $414m. Although segment operating income of $98m increased 8% compared to the previous year, lower volumes and lower energy pass-through reduced sales by 4% and 3%, respectively.
Its Industrial Gases – Asia business demonstrated growth all round, with sales of $449m increasing by 5% as volume growth of 7%, from both underlying base business and new plants, was partially offset by 2% unfavourable currency. As a result, segment operating income increased 5% to $110m.
Despite this, sales over the entirety of fiscal 2016 dropped by 4% to $9.5bn, again due to adverse currency impacts and lower energy prices. However, operating income over the year increased 23% to $2.1bn on the whole.
Seifi Ghasemi, Chairman, President and CEO of the Tier One corporation, praised the company’s staff, suggesting that they “continually strive to be the best in the industrial gases industry, always looking for improvement opportunities and staying focused.”
“We delivered what we promised one year ago, despite a $0.16 headwind from currency and an economic environment which was less robust than anticipated,” Ghasemi added.
“We continue to be very optimistic about the long-term growth opportunities for our focused industrial gases business. Air Products is now very well positioned to take full advantage of these great opportunities.”