Company Will Write Down Assets and Expects to
Record a Pre-Tax Charge
Not to Exceed $3.1 Billion in Its
Fiscal Second Quarter
LEHIGH
VALLEY, Pa., Feb. 24,
2025 /PRNewswire/ -- As part of a review initiated by
Air Products' (NYSE: APD) newly-elected Board of Directors and
Chief Executive Officer, the Company today announced its decision
to exit three projects in the U.S. As a result, Air Products
expects to record a pre-tax charge not to exceed $3.1 billion in its fiscal 2025 second quarter,
primarily to write down assets and terminate contractual
commitments. The estimated charge, which will not impact adjusted
earnings per share for fiscal 2025, relates to the following
projects:
- World Energy: Air Products has terminated the agreement
with World Energy for the Sustainable Aviation Fuel expansion
project in Paramount, California,
and is managing its overall exit from the site. The decision to
exit reflects challenging commercial aspects surrounding the
expansion project and current operations.
- Massena: Air Products
has cancelled its plans to construct a 35 metric ton per day
facility to produce green liquid hydrogen in Massena, New York, and related liquid hydrogen
distribution and dispensing operations. The decision to cancel this
project is based on recent regulatory developments rendering
existing hydroelectric power supply ineligible for the Clean
Hydrogen Production Tax Credit (45V) as well as slower than
expected development of a hydrogen mobility market in the
region.
- Carbon monoxide project in
Texas: Air Products has
terminated a project in Texas for
the production of carbon monoxide due to unfavorable project
economics.
"The decision to exit these three projects will streamline our
backlog and focus Company resources on projects that drive value
for Air Products' shareholders," said Eduardo Menezes, Chief Executive Officer of Air
Products.
Estimated contract cancellation and other project cancellation
costs are subject to further refinement and may ultimately differ
from actual costs recorded in the Company's fiscal second quarter
and beyond. Additional information, including revisions to the
Company's capital expenditures forecast for fiscal 2025, will be
provided in Air Products' fiscal second quarter earnings
release.
Air Products will continue to evaluate all projects in its
backlog but does not currently expect any additional material
cancellations going forward. The Company will provide an update on
major projects during its next earnings call, but specific to Air
Products' two largest projects under execution:
- The NEOM green hydrogen project in Saudi Arabia is approaching 80 percent
completion, with green ammonia production expected to commence at
the end of 2026.
- The Louisiana Clean Energy Complex is also progressing,
with startup expected in 2028. Air Products is in active
discussions with potential equity partners to participate in the
ammonia loop and carbon dioxide sequestration to reduce capital
outlay for this project.
About Air Products
Air Products (NYSE:APD) is a
world-leading industrial gases company in operation for over 80
years focused on serving energy, environmental, and emerging
markets and generating a cleaner future. The Company supplies
essential industrial gases, related equipment and applications
expertise to customers in dozens of industries, including refining,
chemicals, metals, electronics, manufacturing, medical and food. As
the leading global supplier of hydrogen, Air Products also
develops, engineers, builds, owns and operates some of the world's
largest clean hydrogen projects, supporting the transition to low-
and zero-carbon energy in the industrial and heavy-duty
transportation sectors. Through its sale of equipment businesses,
the Company also provides turbomachinery, membrane systems and
cryogenic containers globally.
Air Products had fiscal 2024 sales of $12.1 billion from operations in approximately 50
countries and has a current market capitalization of over
$65 billion. Approximately 23,000
passionate, talented and committed employees from diverse
backgrounds are driven by Air Products' higher purpose to create
innovative solutions that benefit the environment, enhance
sustainability and reimagine what's possible to address the
challenges facing customers, communities, and the world. For more
information, visit www.airproducts.com or follow us on
LinkedIn, X, Facebook or Instagram.
This release contains "forward-looking statements"
within the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
based on management's expectations and assumptions as of the date
of this release and are not guarantees of future performance. While
forward-looking statements are made in good faith and based on
assumptions, expectations and projections that management believes
are reasonable based on currently available information, actual
performance and financial results may differ materially from
projections and estimates expressed in the forward-looking
statements because of many factors, including the risk factors
described in our Annual Report on Form 10-K for the fiscal year
ended September 30, 2024 and other
factors disclosed in our filings with the Securities and Exchange
Commission. Except as required by law, we disclaim any obligation
or undertaking to update or revise any forward-looking statements
contained herein to reflect any change in the assumptions, beliefs
or expectations or any change in events, conditions or
circumstances upon which any such forward-looking statements are
based.
Media Inquiries:
Katie McDonald, tel: (610) 481-3673; email:
mcdonace@airproducts.com
Art George, tel: (610) 481-1340; email:
georgeaf@airproducts.com
Investor Inquiries:
Eric Guter, tel: (610) 481-1872;
email: guterej@airproducts.com
Mun Shieh, tel: (610) 481-2951; shiehmh@airproducts.com
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SOURCE Air Products
