WOKING, UK - Linde (NASDAQ:NYSE:LIN), the industrial gases and engineering company, has initiated operations at its new air separation unit (ASU) in Manyar, Indonesia, to supply industrial gases to PT Freeport Indonesia, a prominent mining firm and a subsidiary of Freeport-McMoRan (NYSE:FCX) Inc. This new facility, representing a $120 million investment, is Indonesia's largest ASU and the biggest in Southeast Asia for Linde.
The ASU is set to provide oxygen and nitrogen to PT Freeport Indonesia's new copper smelter and refining complex, which is among the world's largest copper processing locations. Linde's installation will also cater to the liquefied industrial gas needs of burgeoning and existing bulk customers across East Java, contributing to an expansion of the company's supply network in the region.
Moloy Banerjee, Linde's President for ASEAN & South Asia, remarked on the significance of the project, highlighting the role of industrial gases in enhancing copper smelting efficiency. Banerjee noted that the gases increase production capacity while reducing fuel consumption and emissions. He emphasized the company's commitment to providing safe and reliable supplies of these vital gases to a key industrial market.
Linde, with 2023 sales totaling $33 billion, operates globally, serving diverse sectors including chemicals, energy, food and beverage, electronics, healthcare, manufacturing, and metals and mining. The company's industrial gases and technologies are integral to a wide array of applications, such as clean hydrogen production, carbon capture systems critical for energy transition, medical oxygen, and high-purity gases for the electronics industry. Linde's gas processing solutions are also pivotal in aiding customer growth, efficiency improvements, and emission reduction efforts.
This partnership with PT Freeport Indonesia underscores Linde's strategic position in supporting industrial development and sustainability initiatives. The information for this report is based on a press release statement.
In other recent news, Linde plc has declared a quarterly dividend of $1.39 per share and reported record second-quarter earnings per share (EPS) of $3.85, exceeding estimates. The industrial gas giant also announced a strategic expansion in India with the acquisition of two air separation units and an increased supply of industrial gases to Tata Steel Limited. In addition, Linde's Annual General Meeting approved executive pay, the election of directors, and the ratification of PricewaterhouseCoopers as the independent auditor. For 2024, Linde's full-year EPS guidance is set between $15.40 and $15.60.
In the hedge fund world, D.E. Shaw has decided to back Mantle Ridge's campaign for changes at Air Products and Chemicals (NYSE:APD), Inc., abandoning its own bid for board seats. Analysts from Wells Fargo have praised the potential appointments of Dennis Reilley and Eduardo Menezes to Air Products' leadership, labeling them a "dream team."
Regarding Linde, analysts from BMO Capital, Deutsche Bank, and JPMorgan have expressed confidence in Linde's growth trajectory, with BMO Capital forecasting a 9% and 10% increase in EPS for the years 2024 and 2025, respectively. These recent developments highlight the strategic positioning and financial discipline of both Air Products and Linde in the industrial gas market.
InvestingPro Insights
Linde's recent expansion in Indonesia aligns with its strong market position and financial performance. According to InvestingPro data, Linde boasts a robust revenue of $32.82 billion over the last twelve months, with a healthy gross profit margin of 47.56%. This financial strength supports the company's ability to make significant investments like the $120 million ASU in Manyar.
InvestingPro Tips highlight Linde's stability and growth potential. The company has raised its dividend for 33 consecutive years, demonstrating a commitment to shareholder returns. This consistency is particularly noteworthy given Linde's role in supporting industrial development across various sectors, as evidenced by its new partnership with PT Freeport Indonesia.
Moreover, Linde's position as a "prominent player in the Chemicals industry" is reinforced by its global operations and diverse client base. The company's ability to generate strong cash flows that "can sufficiently cover interest payments" suggests financial resilience, which is crucial for sustaining large-scale projects and international expansions.
For investors seeking more comprehensive insights, InvestingPro offers 12 additional tips for Linde, providing a deeper understanding of the company's market position and potential.
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