NewsFlashRita: Air Products sees reduced Q4 earnings

27 September 2005 22:10  [Source: ICIS news]

HOUSTON (ICIS news)--Air Products said on Tuesday it anticipates an unfavourable fiscal 2005 fourth quarter impact to its business operations as a result of hurricanes Katrina and Rita.

 

The Lehigh Valley, Pennsylvania-based industrial gas company said it anticipates an unfavourable impact in the range of 5-7 cents/share.

 

The losses were caused by property damage and business interruption in both Air Products’ gases and chemicals businesses, the company said. The impacts only reflect expected insurance recovery for certain property damage costs and do not reflect any expected insurance recovery for business interruption.

 

Air Products declared force majeure on 31 August regarding liquid hydrogen from New Orleans, Louisiana and Sarnia, Ontario, Canada - plants which represent about 90% of the company's liquid hydrogen production in North America.

 

The company's New Orleans industrial gas complex sustained extensive damage from 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, Air Products said.

 

The New Orleans facility should begin operations within the coming months, with substantial operations anticipated by the end of the calendar year, the company said.

 

Last week, the company's production sites in Texas and Louisiana weathered Rita well with only minor damage, Air Products said. 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 on Air Products, the company said.

 

The company will release its fiscal fourth quarter earnings and fiscal 2006 guidance on 26 October.

By: Brian Ford
+1 713 525 2653

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