Air Products plans big dividends in 2025

LEHIGH VALLEY, Pa. – Air Products, the worldwide industrial gases company, headquartered in Upper Macungie Township, Lehigh County, reported that fiscal 2024 fourth quarter revenue declined slightly and did not reach analysts’ expectations. The culprit was its Americas segment, which saw sales decline over 3% year-over-year.

However, earnings increased, and the company’s stock was up over 3% mid-morning.

During the fourth quarter, Air Products completed the sale of the company’s former Liquid Natural Gas business which netted a $1.2 billion after-tax gain.

Air Products’ chairman, president and chief executive officer Seifi Ghasem has gained a reputation for looking after the interests of the company’s shareholders and he delivered in his quarterly report, saying that he expected to distribute around $1.6 billion in dividends in fiscal 2025.

Commenting on the results in a statement, Ghasemi said, “For our fiscal fourth quarter, the team at Air Products delivered adjusted Earnings per Share (EPS) up 13 percent over last year and industry-leading adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) margin of more than 44 percent.

“The 15-year supply agreement we signed with TotalEnergies to provide 70,000 tons of green hydrogen annually starting in 2030 is a great example of our ability to sign offtake agreements that are aligned to our traditional on-site business model. Air Products also continues to generate strong and steady cash flow that supports disciplined capital allocation and our long history of returning cash to shareholders.”

Fiscal 2024 Full-Year Consolidated Results

Air Products reported full-year fiscal 2024 results, including GAAP (Generally Accepted Accounting Principles) EPS from continuing operations of $17.24, up 67 % from the prior year. GAAP net income of $3.9 billion was up 65 % and GAAP net income margin of 31.9 % increased 1,330 basis points, in each case primarily due to a $1.2 billion after-tax gain recognized upon the sale of the company’s former LNG business at the end of the fourth quarter.

For the year, Air Products stated, on a non-GAAP basis, adjusted EPS from continuing operations of $12.43 increased 8% over the prior year. Adjusted EBITDA of $5.0 billion was up 7% primarily due to positive pricing, favorable business mix, and improved productivity, partially offset by inflation and higher planned maintenance. Adjusted EBITDA margin of 41.7 % increased 440 basis points, with lower energy cost pass-through contributing approximately 200 basis points.  

According to the company, full-year sales of $12.1 billion decreased 4% compared to the prior year due to 5% lower energy cost pass-through, which was partially offset by 1% higher pricing.

Fiscal 2024 Fourth Quarter Consolidated Results

Air Products also reported fourth quarter fiscal 2024 results, including GAAP EPS from continuing operations of $8.81, up 186%  from the prior year. GAAP net income of $2.0 billion was up 181% and GAAP net income margin of 61.2 % increased 3,940 basis points, in each case primarily due to the $1.2 billion after-tax gain recognized upon the sale of the Company’s former LNG business.

For the quarter, on a non-GAAP basis, Air Products reported adjusted EPS from continuing operations of $3.56 increased 13% over the prior year. Adjusted EBITDA of $1.4 billion was up 12%  over the prior year, primarily driven by higher volumes and positive pricing. Also, the company noted adjusted EBITDA margin of 44.1% increased 460 basis points over the prior year, with lower energy cost pass-through contributing approximately 100 basis points. 

Fourth quarter sales of $3.2 billion were flat versus prior year as 1% each higher volumes and pricing were offset by 2% lower energy cost pass-through.

Fiscal 2024 Fourth Quarter Results by Business Segment 

• Air Products reported Americas sales of $1.3 billion were down 3% versus the prior year, as 5% lower energy cost pass-through and 1% unfavorable currency were partially offset by 3% higher pricing. Volume was flat.  The company said operating income of $448 million increased 13% and adjusted EBITDA of $668 million increased 11%, in each case primarily due to higher pricing and favorable mix driven by a one-time asset sale associated with an early contract termination at the request of a customer and higher hydrogen demand. Operating margin of 34.2% percent increased 480 basis points and adjusted EBITDA margin of 51.1% increased 660 basis points, including positive impacts from lower energy cost pass-through of approximately 150 and 200 basis points, respectively.

• Asia sales of $861 million, the company noted, increased 7% from the prior year on 7% higher volumes and 1% higher energy cost pass-through, partially offset by 1% lower pricing. Operating income of $244 million increased 24% and adjusted EBITDA of $383 million increased 21%, in each case primarily due to higher volumes and lower costs. Operating margin of 28.4% increased 380 basis points and adjusted EBITDA margin of 44.5% increased 490 basis points.

• Air Products reported Europe sales of $731 million increased 3% from the prior year as 2% higher pricing and 2% favorable currency were partially offset by 1% lower energy cost pass-through. Volume was flat as new on-site assets were offset by lower merchant demand. Operating income of $207 million increased 23% the company said and adjusted EBITDA of $292 million increased 17%, in each case primarily due to higher pricing. Operating margin of 28.3% increased 470 basis points and adjusted EBITDA margin of 40.0% increased 490 basis points. 

• Middle East and India equity affiliates’ income of $92 million was flat with the prior year.

• Corporate and other sales of $257 million decreased 11% compared to the prior year, primarily due to lower equipment sales and higher cost estimates related to sale of equipment activities.

Outlook

Air Products expects full-year fiscal 2025 adjusted EPS of $12.70 to $13.00. For the fiscal 2025 first quarter, Air Products’ adjusted EPS guidance is $2.75 to $2.85.

Air Products expects capital expenditures* in the range of $4.5 billion to $5.0 billion for full-year fiscal 2025.

Air Products (NYSE: APD) is a world-leading industrial gases company in operation for over 75 years. The company’s core industrial gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage.