The operator introduces the Air Products' First Quarter Earnings Release Conference Call and introduces Sidd Manjeshwar, Vice President of Investor Relations and Corporate Treasurer. Sidd Manjeshwar welcomes everyone and introduces the other speakers for the call. He mentions that the earnings release and slides are available on the company's website and reminds listeners about forward-looking statements and financial measures that will be discussed. He then hands over the call to Seifi Ghasemi, the Chairman, President, and CEO of Air Products.

In his speech, Seifi Ghasemi, the CEO of Air Products, begins by thanking everyone for joining the call and emphasizing the company's focus on safety. He then discusses the company's management philosophy and highlights their first quarter results, which saw a 7% increase in adjusted earnings per share. However, the results did not meet the previously given guidance due to larger volume headwinds from weak economic growth in China and lower helium demand in the electronics industry. Despite this, Ghasemi mentions that their pricing in helium remains stable and robust.

The company has experienced higher costs due to a sale of equipment project and currency devaluation in Argentina. As a result, their full-year guidance range has been revised to an adjusted earnings per share of $12.20 to $12.50. Despite these challenges, the company remains committed to delivering positive volume contributions and improving their LNG sale of equipment business. They also plan to continue investing in high return projects and returning cash to shareholders through dividends. The company has a strong track record of delivering consistent earnings growth and thanks their employees for their hard work.

The company's balanced approach to capital allocation has allowed them to meet their needs while maintaining their A2 credit rating. Their EBITDA margins have returned to 40%, showing a 1,500 basis point improvement since 2014 and leading the industry. The Chief Financial Officer reported strong first quarter results with underlying sales growth and improved EBITDA. However, there were some unfavorable factors, such as lower demand for helium in Asia and seasonality in the Americas.

In the fifth paragraph, the speaker discusses the company's first quarter adjusted earnings per share, which increased by $0.18 or 7% compared to last year. This was due to favorable volume, pricing, and higher equity affiliate income, offset by unfavorable costs. The Americas segment saw a 5% increase in price and volume, resulting in a 9% increase in EBITDA. The EBITDA margin also improved by 800 basis points due to lower energy cost pass-through.

In this paragraph, the company discusses the decrease in EBITDA due to seasonality and maintenance activities in the winter. They then review the results for their Asia, Europe, and Middle East and India segments, highlighting the challenges in China and the weak electronics market. They also mention the positive impact of new projects and stable pricing in Europe. Finally, they discuss the results for their corporate and other segment, which includes their equipment businesses and centrally managed functions.

The article discusses the decline in EBITDA despite higher sales from LNG activity and the company's strong commitment to its LNG equipment and technology business. The CEO expresses pride in the company's people and their dedication to overcoming challenges. He also highlights the company's sustainable growth strategy in its industrial gases and blue and green hydrogen projects, which align with their higher purpose of solving energy and environmental challenges. The company aims to help customers improve efficiency and reduce their carbon footprint.

Air Products is demonstrating its leadership position in producing low and zero carbon hydrogen for heavy duty transportation and industry. This will contribute to the goal of decarbonizing the world and provide long-term shareholder value. The Gulf Coast ammonia project is currently producing revenue for the company. In the first quarter, expenses were higher due to the sale of equipment, but the company expects costs to be lower going forward.

The speaker, Seifi Ghasemi, responds to a question about the company's helium business. He clarifies that there are no issues with supply, but demand is lower, especially in electronics in China and Asia. The company is holding onto pricing and may have lost some market share. In terms of volumes, Asia is the largest consumer. The second question is about the company's guidance, which suggests an EPS of $5.50 in the first half of the year and $7 in the second half.

Seifi Ghasemi, CEO of Air Products, was asked about the company's confidence in a better second half of the year compared to the weaker first half. He explained that their guidance is based on their best estimate and takes into account the company's historical performance, with the second half typically being stronger due to seasonality. He also mentioned that they are expecting higher income from their onsite projects in the second half. Ghasemi clarified that the weakness in China is not related to their onsite operations, but rather to the merchant side and helium, which is affected by the current economic situation in China. He cautioned that the economic activity in China is not as strong as people may think, making their products a leading indicator.

During a conference call, an analyst asked about the safety of a plant located near recent missile strikes in Yemen. The CEO reassured that there have been no incidents at the plant and operations are running smoothly. The CEO also mentioned the company's investment in the plant, including the production of syngas and supply of hydrogen to the refinery. The analyst also asked about the company's CapEx target for the year, and the CEO mentioned that the project in North Texas is not a significant part of the budget.

The company plans to spend $5 billion to $5.5 billion on various projects, including a green and blue hydrogen facility, a sustainable airline fuel facility, and maintenance. They also plan to increase their dividend, but the amount may seem modest compared to previous years due to the current high stock price. The CEO believes dividends should be a percentage of the stock price.

In this paragraph, the speaker discusses the issue of increasing dividends in relation to stock prices and the return for shareholders. They also mention that they cannot disclose details about their customers' projects due to confidentiality agreements. The question is then asked about the surprise in the helium market for electronic customers.

Seifi Ghasemi, the CEO of Air Products, is asked about the slowdown in the electronics industry and if it has reached a comfortable level. He explains that the industry typically slows down in the fourth quarter after the rush to produce chips for holiday products. He also mentions that economic conditions and high helium prices may be contributing to the slowdown. When asked about the recent winter storm in the Gulf Coast, Ghasemi is unable to predict if there will be downtime for plants or customers.

Seifi Ghasemi, along with Samir Serhan and Vincent Andrews, discuss the demand for hydrogen during the first quarter and the impact of helium profit decline. They do not disclose specific details of the helium business for competitive reasons, but state that compared to last year, they are still ahead but did not expect the current weakness in helium. They also mention the Alberta project, which is expected to start up within 12 months and contribute to earnings throughout 2025.

The paragraph discusses the Alberta project and the expected timeline for its start-up, with Dr. Serhan providing details and confirming the company's commitment to the project. The question then shifts to the company's guidance and potential challenges and uncertainties, to which Seifi Ghasemi clarifies that they do not expect any significant improvements in the world economy and are hoping for stability.

The speaker responds to a question about the increase in cost of equipment sales and mentions that it is due to inflation and delays in execution. They also provide updates on the status of various projects, including NEOM, the two blue hydrogen projects, and SAF. The expected start-up dates for these projects are December 31, 2026 for NEOM, fiscal year 2028 for Louisiana, and fiscal year 2027 for SAF, though this could change depending on obtaining necessary permits.

The speaker, Seifi Ghasemi, responds to a question about natural hydrogen deposits and states that they are not involved in any projects related to it. He also mentions that the company is not planning to get involved in such projects as they do not see it as a realistic option. The next question is about the company's discussions for green and blue ammonia potential off-take, to which Ghasemi replies that they have previously stated that no announcements will be made until closer to the project start-up, as they believe the demand for their product will increase as the deadline for environmental compliance approaches. Therefore, they are not in a hurry to sign any agreements and will take their time.

Seifi Ghasemi, CEO of Air Products, discusses the possibility of announcing a long-term contract for green hydrogen sooner if the prices are right. He also disagrees with the idea that the Treasury Department's guidance on the green hydrogen tax credit is limiting, stating that Air Products is fully compliant and committed to investing billions of dollars in green hydrogen production. He emphasizes the importance of the three pillars of the guidance, including additionality, hourly production, and being on the same network.

The speaker expresses support for the Treasury department's principles regarding the IRA and its purpose to improve the environment. They stress that their company is complying with these rules and spending billions of dollars on projects. The speaker then addresses a question about cash flow, stating that while operating cash flow was down in the first quarter, their EBITDA is increasing and therefore cash coming to the company is also increasing. They clarify that the reported cash flow numbers are based on accounting and may differ from the actual cash received due to equity affiliates.

Melissa Schaeffer explains that the company's EBITDA cash conversion is stable and their distributable and investment cash flow are positive. However, there was a slight decrease in operating cash flow due to timing and managing their helium supply chain. Duffy Fischer asks about the EPA's decision to give Louisiana authority over CO2 sequestration and Seifi Ghasemi responds that it will speed up the process and they have a good relationship with the state.

Seifi Ghasemi discusses the impact of workload distribution on the approval of their project in Louisiana, stating that it will be approved a year faster than if the federal government handled it. He also addresses the possibility of illegal helium supply from Russia's Amur project due to global sanctions. In addition, Melissa mentions the devaluation of the Argentine peso and the cost overrun from a sale of equipment project.

In response to a question about the impact of various issues on the quarter's results, Seifi Ghasemi, the company's CEO, quantifies the impact of the Argentine currency, stating it had a $10 million effect on the bottom line and a $0.03 impact. When asked about the impact of other issues, such as the sale of equipment and a slowdown in China, Ghasemi declines to provide specific numbers, citing concerns about revealing competitive information. He also discusses the company's strong performance in Europe and the success of maintaining pricing despite fluctuations in energy prices. Regarding the Uzbekistan project, Ghasemi defers to Dr. Samir Serhan, who states that the European business did well during the quarter and that the Uzbekistan project is performing according to expectations.

The speaker begins by expressing how well the project has been for both Air Products and Uzbekistan, as it aligns with the country's goals for energy independence and socioeconomic development. The project includes the world's largest ATRs and is expected to contribute around $0.35 for the full year. The speaker then corrects a mistake about the timing and opens up for more questions. The following question is about fiscal '24 EPS growth, and the speaker explains that the projects recently brought onstream are contributing as expected, but there are also other headwinds affecting the growth rate. The speaker concludes by saying that overall, there is still growth despite some negative factors.

During a recent conference call, Air Products CEO Seifi Ghasemi discussed the company's growth prospects for the coming years, including the contributions of new products and projects. Ghasemi stated that the company aims to maintain a 10% EPS growth rate, which they have consistently achieved in the past. The next project to come online will be in Alberta, Canada in fiscal year 2025, followed by other projects in 2026 and 2027.

The speaker is discussing the SAF project and its expected start-up date in 2027. They mention that there has been a delay due to permit issues in California and that once the permits are finalized, a definite start date can be given. The potential cost of the project is also mentioned, with the speaker emphasizing that the return on capital spent will not be affected. The last question is about merchant pricing, which the speaker says seems to be stable in Europe and the U.S. The questioner also asks about guidance.

The speaker is responding to questions about the EPS growth rate and pricing strategy for clean ammonia and clean hydrogen projects. They explain that they are the first mover in these projects and should be rewarded for taking the risk. They also believe there will be high demand for their products due to compliance rules in Europe. Their philosophy is to maximize profit and they are not in a hurry to give away their products. They do not have concerns about potential changes in subsidies.

The speaker, Seifi Ghasemi, discusses how recent events in different parts of the world have shown that their strategy is effective. He also addresses a report from the International Energy Agency about the slow progress of green hydrogen projects. Another question is asked about merchant pricing and FX assumptions, which is answered by Melissa Schaeffer. Ghasemi thanks everyone for joining the call and looks forward to discussing results in the future.

The operator thanks everyone for participating in the conference and announces that it has come to an end. They also give permission for participants to disconnect from the call.

This summary was generated with AI and may contain some inaccuracies.