Air Products Q2 sales slip 8% amid pricing challenges

Air Products has today (30^th April) reported its second quarter (Q2) financial results, reporting a sales decrease of 8% to $2.9bn.

The industrial gas giant said its quarterly sales were negatively impacted by lower energy cost pass-through, lower volumes, and unfavourable currency.

Despite the sales slip, Air Products did report increased earnings and net income.

GAAP EPS from continuing operations of $2.57 was up 30% from the prior year, and GAAP net income of $581m was up 29% over the prior year.

Commenting on the financials, Air Products’ Chairman, President, and CEO, Seifi Ghasemi, said, “We delivered in the second quarter of fiscal year 2024, despite the challenging economic and geopolitical circumstances.”

Ghasemi also said that he is confident that with cost discipline, a focus on pricing, and execution across the business, Air Products will continue to create shareholder value.

Results by region

The negative sales hit was felt across every region that Air Products operates in. In the Americas, sales of $1.2bn were down 9% versus the prior year; in Asia sales of $780m were down 4% versus the prior year; and sales in Europe were of $668m down 11% from the prior year.

Diving deeper into each region, operating income in the Americas of $372m and adjusted EBITDA of $590m both increased 15%, in each case primarily due to higher pricing and volumes.

Adjusted EBITDA also benefited from higher equity affiliates’ income. Operating margin of 29.9% increased 630 basis points, and adjusted EBITDA margin of 47.4% increased 1,000 basis points.

Operating income of $204m in Asia decreased 13% and adjusted EBITDA of $328m decreased 6%, in each case primarily driven by volume and unfavourable currency. Operating margin of 26.1% decreased 250 basis points and adjusted EBITDA margin of 42.1% decreased 90 basis points.

In Europe, operating income of $201m increased 16% and adjusted EBITDA of $264m increased 5% primarily due to lower power and other costs. The favourable impact of these items on adjusted EBITDA was partially offset by lower equity affiliates’ income.

Operating margin of 30.1% increased 710 basis points and adjusted EBITDA margin of 39.5% increased 620 basis points.

Middle East and India equity affiliates’ income of $74m decreased 25% compared to the prior year, primarily due to higher interest expense and other operating costs.