Air Products announced it currently anticipates the impact of hurricanes Katrina and Rita to its business operations will result in an unfavourable fiscal fourth quarter impact in the range of $.05 to $.07 per share.
The losses are attributable to property damage and business interruption in both its gases and chemicals businesses. In accordance with the company's accounting policies, these impacts only reflect expected insurance recovery for certain property damage costs and do not reflect any expected insurance recovery for business interruption.
At the end of last month Air Products declared force majeure regarding liquid hydrogen from New Orleans, Louisiana and Sarnia, Ontario, Canada – plants, which represent approximately 90 per cent of the company's liquid hydrogen production in North America.
The company's New Orleans industrial gas complex sustained extensive damage from hurricane Katrina. The company's Sarnia production facility was originally shut down due to a planned suspension of a supplier's feedgas when the hurricane hit the New Orleans facility. The Sarnia plant has resumed partial operations, relieving but not mitigating the shortage. The New Orleans facility should begin operations within the coming months, with substantial operations anticipated by the end of the calendar year.
Most recently, the company's production sites in Texas and Louisiana weathered hurricane Rita well with only minor damage. Most plants shut down prior to the storm have been restarted and are on line, with the remaining plants expected to resume production as power and other utilities are restored. However, the general disruption to the area's petrochemical system will have a short-term impact to Air Products.