Air Products and Chemicals, Inc. (NYSE:APD) Q3 2023 Earnings Call Transcript - Page 4 of 9 - InvestingChannel

Air Products and Chemicals, Inc. (NYSE:APD) Q3 2023 Earnings Call Transcript

John McNulty: I’m great. I’m great. Hopefully, you are as well. Wanted to ask on the Uzbek project, that you’re bringing on. I guess, I guess a couple of questions on that. Can you help us to understand, because it looks like it comes on at some point relatively early in ’24, but — so can you help us to understand the timing of it? And also the EPS contribution that you expect it to give, as you look to 2024? And then I guess also tied to that project, yes, how do you think about the returns for – I know you look for a 10% plus return, but I also know you risk adjust those as well. So, I guess, how should we be thinking about that for the Uzbek project?

Seifi Ghasemi: Well, I will – I’ll make some general comments and then I’ll turn it over to Dr. Serhan to kind of elaborate even more in detail. But we expect that project, which is a very good project as Dr. Serhan mentioned, that project has the largest ATRs in the world and we are very happy to own it now. We expect contribution from that project in our bottom line for sure in 2024 – in our fiscal year 2024. In terms of the exact number, obviously, I can’t give you the exact number, but order of magnitude, order of magnitude we expect a contribution of about $0.35 per share at least. So Dr. Serhan would you like to comment.

Samir Serhan: It starts really with what is really included in this acquisition. So this is really the two largest world scale ATRs in the world. There is also a hydrogen unit through a large air separation units around 12,000 tonne per day. The plant is already built, it’s in the process being commissioned right now and that’s why we see it is going to be a set of our earnings next year 2024 and it would be fully in the numbers for 2025. Again, we’re very proud of the project and really operating those ATRs with Haldor Topsoe technology is really going to give us lots of know-how about how to really optimize our positioning in blue hydrogen in the future.

Seifi Ghasemi: Okay, John?

John McNulty: Got it. Perfect. No, thanks for the color. And then maybe just as the follow-up, you’ve got the Alberta project or Edmonton project coming on next year. It does seem like the demand for clean hydrogen is picking up in the region. Is that project sold out at this point based on the contracts that you’ve locked up?

Seifi Ghasemi: John, on that front, we have announced, what the signing of a long-term contract with Imperial Oil, which is part of Exxon, and we have given you the details of that. The rest of it we have very clear visibility to where we are going to sell it. So I think it’s a matter of semantics when you say sold out, that means contracts that have been signed and finalized for the fact that we feel that it is going to be sold out. So we feel very strongly that we will sell all of that product and we might actually need more than that. I’d like to have Dr. Serhan to make some comments about where we are on this thing and any additional color.

Samir Serhan: Thanks, Seifi. IOL is the anchor customer for this project. We’re working together with them to bring our respective facilities onstream. Please note the products out of this project will go into our existing pipeline systems, which we have a system in Edmonton, Canada. And this will be feeding IOL, our customers and also hydrogen for mobility because we are building a fueling station also they have to use low-carbon hydrogen for mobility. It’s going very well. I mean, working very closely with IOL as the anchor customer.

Seifi Ghasemi: Okay, John?

John McNulty: Got it. Thanks. Thanks very much for the color.

Seifi Ghasemi: Thank you.

Operator: Our next question comes from Mike Sison with Wells Fargo. Please go ahead.

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