Corrected: BOC Q2 underlying profits up 6%

11 May 2006 14:11  [Source: ICIS news]

Corrected: In the ICIS news story headlined "BOC Q2 underlying profits up 6% at £152m" dated 11th May 2006, please read in the second paragraph ... Group operating profits for the quarter were £95.9m ... instead of $95.9. A corrected story follows.

LONDON (ICIS news)--BOC on Thursday said its second quarter adjusted operating profits, including profits from joint ventures, rose 6% to £152.4m ($284.5m/Euro223.7m) on a strong earnings from across the business units

Group operating profits for the quarter were £95.9m against £215.9m in Q1 2005, the earlier quarter including profits from disposals. BOC said that total revenues for the quarter were 8% higher at £1.24bn.

The positive trend seen in the first quarter had continued into the second quarter, BOC said. Its current financial year ends on 30 September 2006.

The Process Gas Solutions business, which services heavy industry, had performed particularly strongly, the company said.

First half PGS profits were up 11% with revenues up 16% on a constant currency basis. Some of the revenue growth came from higher prices, raised to cover energy costs but underlying growth was 9%, BOC said.

Industrial and special products performed well in North America, Africa and the South Pacific but growth was held back by what BOC called challenging conditions in the UK. The business sells gases in smaller volumes.

Revenues for the BOC Edwards business that sells into the electronics industry picked up strongly in the second quarter with better sales of semiconductor equipment. Half year adjusted operating profits improved significantly.

Chief executive Tony Issac said better gases profits in the first half were built on higher volumes overall and good recovery of higher energy costs in selling prices.

“Our investment programme is gathering pace with an important hydrogen plant commissioned in the US during March and six other major plants due to be commissioned before the year end,”  he added. Adjusted return on capital was maintained at 15.9% in Q2 even after investing in these construction projects, he said.

BOC has won a number of new contracts recently including the formation of a joint venture with Shanghai Petrochemical to acquire four air separation units and build a further unit producing 1,400 tonne a day of oxygen. The joint venture will supply SPC and third parties with more than 5,000 tonne a day of oxygen, nitrogen and argon.

Issac said in a conference call that the pre-conditional cash offer from Linde for BOC was proceeding to plan. The offer values the UK based group at £14bn and could be closed in August if it is approved by regulatory authorities as expected by late May or early June.

BOC’s first half group operating profit was £208.9m against £335.2m. The total adjusted operating profit in the first half was up 4% at £303.4m on total revenues up 6% at £2.47bn.

By: Nigel Davis
+44 20 8652 3214

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