Praxair, Inc. has released its full year and fourth quarter results for 2015, showing full year sales stand at a total of $10.8bn – a dip of 12% from the previous year for the industrial gas giant.
The company also reported a fourth quarter net income of $422m, with sales of $2.6bn in the fourth quarter, which is down from the prior year by 13%. The company attributes a negative currency translation and a lower cost pass-through, primarily in the natural gas sector, to this underperformance.
Underlying sales were also 1% below the prior-year quarter, but growth from higher price, new project start-ups and acquisitions was offset by lower volumes due to weaker industrial activity in Brazil and China and in the metals and manufacturing end-markets in North America.
Despite this, operating profit in the fourth quarter stood at $624m and, excluding currency translation effects, grew 5% above the prior-year quarter. For the full year of 2015, the company reported net income was $1.5bn, which, on an adjusted basis for inflation, brings the full net income total to $1.6bn for the fiscal year.
For the full year of 2015, the company generated a strong operating cash flow of $2.6bn, 25% of which accounted for sales. After capital expenditures of $1.5bn, free cash flow was estimated at $1.1bn. Throughout the year the company invested $82m in acquisitions, primarily in the packaged gas distributor sector of the US.
Steve Angel, Chairman and CEO of Praxair, commented on the financial results, “2015 was a challenging year from a macro-economic perspective, but Praxair employees again delivered high-quality results. The macro-economic headwinds faced in 2015 from negative currency translation and the slowdown in global industrial activity have not yet abated, and we expect a continuation of current trends into 2016. However, we remain confident in our business strategy.”
“We continue to grow the business in more resilient end-markets and we have new on-site projects starting-up that will contribute growth and with our strong cash flow, we will continue to reinvest in the future growth of the company through synergistic and accretive tuck-in acquisitions in attractive end-markets as well as new project opportunities where we bring a competitive advantage.”
“Praxair’s focus on building network supply density in targeted geographies will continue to deliver solid cash flow generation and position us for highly accretive growth once these cyclical headwinds turn.”
Breakdown of fourth-quarter by region:
- North America sales for this quarter totalled $1.4bn - down 3% from the prior year but operating profit was up 9% to $406m.
- In Europe, fourth quarter sales were at $325m - 9% lower than the previous year but operating profit grew 13% to $62m.
- South American sales for the fourth quarter totalled $299m – a massive drop in 37% from the previous year’s quarter.
- Sales in Asia stood at $398m - 2% below the prior year quarter.
On top of this, the Tier One company declared a 5% increase in the company’s quarterly dividend to $0.75 per share, marking the 23rd consecutive to common shareholders.