Linde Raises 2022 Guidance But Warns of Russia Charges -- Update

   By Ed Frankl 
 

Linde PLC on Thursday raised its full-year guidance after first-quarter profit and sales rose on year, despite warning of potential impairments from its scaling down in the Russian market.

The multinational industrial-gases and engineering company raised its full-year guidance for adjusted diluted earnings per share to between $11.65 and $11.90, representing 9% to 11% annual growth, 11% to 13% after adjusting for currency effects.

Previously, Linde targeted 2022 adjusted EPS of $11.55 to $11.85.

The upgraded guidance excludes contribution from Russian earnings in the second half of the year, as the company scales back its operations in the country and winds down engineering projects affected by sanctions, it said.

The company said that it may incur impairment and other charges in future quarters as it scales back from the market, with any charges potentially having an adverse effect on Linde's operating or cash-flow result.

The winding down of projects in Russia, which generated around 1% of sales in 2021, impacted the company by around $350 million in sales in the first quarter, Linde said.

The company previously said it was halting supply to certain customers and divesting industrial assets to reduce its footprint in the country.

As of March 31, Linde had around $2 billion in contract liabilities related to engineering projects in Russia, it added.

"Looking ahead, the geopolitical and macro environment has become more uncertain, but I have confidence the company will continue to deliver on commitments to shareholders," Chief Executive Sanjiv Lamba said.

In first-quarter earnings, net profit was $1.17 billion, or $2.30 a share, up from $980 million, or $1.86 a share, in the prior-year quarter, the DAX-listed company said.

Linde's adjusted earnings from continuing operations rose 14% to $1.50 billion, with the equivalent EPS at $2.93 for the three-month period, up 18% from the previous year's first quarter.

Earnings growth was led by higher pricing, strong volumes and continued productivity initiatives across all segments, the company said.

Sales rose 13% to $8.21 billion, with revenue in the Americas business, which generates most of Linde's sales, up 14%, the company said.

The results compare with expectations of $1.27 billion for net profit and $7.40 billion for sales, according to analysts polled by FactSet.

Sales were up slightly compared with the final quarter of 2021, as Linde took advantage of higher pricing, offsetting seasonally lower volumes.

Shares in Frankfurt trade 1.1% lower at EUR288.30.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

April 28, 2022 07:32 ET (11:32 GMT)

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