For the year as a whole, the Dax group is once again raising its expectations slightly.
(Photo: dpa)
Munich The withdrawal from Russia will cost the world’s largest industrial gases company, Linde, almost a billion dollars. The German-American group announced on Thursday that special charges of 993 million dollars were posted in the second quarter, most of which were due to depreciation and deconsolidation effects of the Russian subsidiaries. This is initially only a balance sheet effect. “We still own these assets and we want to sell some of them,” CFO Matt White said. Linde had stopped new business in Russia and is shutting down the remaining business in an orderly manner. Since July, the sales are no longer accounted for.
Plant construction, which is based in Pullach near Munich, is particularly affected by the withdrawal. He had projects from Russia worth around two billion dollars on his books – for example for gas liquefaction plants for the Russian natural gas giant Gazprom. Because these orders are obsolete, employees fear for their jobs. According to company circles, it is about 400 to 500 jobs.
Linde boss Sanjiv Lamba confirmed reduction plans for the first time, but without naming any figures. It’s about adjusting the cost base, he said when asked by analysts. “We have a restructuring plan that we want to implement within a few months.” After all, new orders came in for over a billion dollars in the second quarter, with the order backlog in plant construction growing to almost three billion. Linde had already cut hundreds of jobs in the gas business in Germany last year.
Lamba, who took over as CEO of Linde in March, tried to calm analysts’ fears of the impending gas shortage in Germany. On the one hand, the business there accounts for only five percent of the group’s sales. On the other hand, two thirds of them are medical and process gases, without which it would not work. One is “in intensive talks” with the federal government. The risk that she cuts off the gas supply to Linde is “minimal”.
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In the second quarter, earnings from continuing operations collapsed to $372 million (previous year: $840 million) due to the withdrawal from Russia. Adjusted for special effects, it would have increased by eleven percent to 1.57 billion dollars, according to Linde. At $3.10 per share, the adjusted earnings that Linde uses as a measure of success exceeded its own forecast of $2.90 to $3.00. Revenue increased 12 percent to $8.46 billion between April and June, largely due to price increases. French rival Air Liquide also reported that it had been able to pass on rising natural gas prices to customers, particularly in industry and the electronics sector.
For the year as a whole, Linde raised expectations again slightly, although the Russian business is no longer included: Earnings per share should be between 11.73 and 11.93 (previously 11.65 to 11.90) dollars, which would be ten to twelve percent more than a year earlier. Linde is assuming zero growth for the global economy. “If it gets better, we’ll do better,” White said.
More: Linde plant construction is facing job cuts after Russia sanctions