Linde's Q1 net profit rises 72% to €198m on improved sales

04 May 2010 10:23  [Source: ICIS news]

LONDON (ICIS news)--The Linde Group’s first-quarter net profit increased 72% year on year to €198m due to a significant increase in sales and continuing demand from emerging economies in the global gases market, the company said on Tuesday.

The German technology company said sales rose 7.4% to €2.89bn in the three months to 31 March from €2.70bn a year earlier. After adjusting for exchange rate effects, the increase in sales was 3.9%, it said.

Earnings before taxes on income rose 67% to €283m from €170m in the first three months of 2009, according to a company statement.

"It looks as if the worst is behind us. Towards the end of the first quarter in particular, we noticed a marked revival in demand," Linde’s CEO, Wolfgang Reitzle, said.

Reitzle said the company still expected to achieve higher sales and earnings in 2010 compared with last year, as it predicted.

Adjusted operating profit grew at a faster rate than sales, by 19.1% to €641m from €538m in 2009.

Reitzle said achieving a faster rate of growth in operating profit than in sales remained its goal, and that measures taken to ensure sustainable productivity improvements would help to achieve this.

Operating margin increased from 20.0% to 22.1%. Restructuring costs of €20m were recognised in the first quarter of 2009, the company said.

Gases division sales in the first quarter rose 8.5% year on year to €2.34bn, while on a comparable basis sales increased by 3.9% after adjusting for exchange rate effects, changes in the natural gas price and changes to group structure, Linde said.

 

The gases unit's operating profit improved by 14.5% year-on-year to €625m and Linde expected the division to further increase its sales and earnings in 2010, it said.

In its international plant construction business, Linde said it experienced a slight increase in demand in the four major product segments of olefin plants, natural gas plants, air separation plants, and hydrogen and synthesis gas plants, which had a positive impact on order intake in the engineering division.

Total incoming orders in the first quarter nearly doubled to €502m from €285m in the year-earlier period and the order backlog of €4.28bn at 31 March provided a good basis for a stable business performance over the next two years, the company said.

Linde said it expected growth in investment in the international construction of large-scale plants to come primarily from China, India and the Middle East during the remainder of 2010.

However, given continuing economic uncertainty, it was still likely that the award of some projects would be postponed, it said.

Linde said it expected engineering division sales in 2010 to be at least at the same level as in 2009, while its operating margin target remained at 8%.

At 08:00 GMT, Linde shares were trading at €89.6, down 2.1 pence or 2.3% from the previous close of €91.7.

For more on Linde visit ICIS company intelligence
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By: Elaine Mills
+44 208 652 3214



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