Air Products Reports Significant Financial Decline in Q2 and First Half of Fiscal Year 2025

Air Products and Chemicals, Inc. reported a significant decline in financial performance for the second quarter and first half of fiscal year 2025, primarily driven by substantial charges related to business and asset actions. For the three months ended March 31, 2025, the company recorded sales of $2.92 billion, a slight decrease of 0.5% from $2.93 billion in the same period last year. The operating loss for the quarter was $2.33 billion, compared to an operating income of $637.2 million in the prior year, reflecting a negative operating margin of 79.8%. The net loss attributable to Air Products was $1.73 billion, or a loss of $7.77 per share, compared to a net income of $580.9 million, or $2.57 per share, in the previous year.

The financial results were heavily impacted by a pre-tax charge of approximately $2.93 billion related to strategic business and asset actions, which included project exit costs and shareholder activism-related expenses. This charge significantly overshadowed the previous year's modest charge of $57 million. The company also faced a decline in equity affiliates' income, which rose slightly to $145.5 million from $143.3 million, but was overshadowed by the overall losses. Adjusted EBITDA for the quarter decreased by 3% to $1.17 billion, reflecting the adverse effects of lower volumes and unfavorable currency impacts.

In terms of operational developments, Air Products has been focusing on strategic initiatives, including the exit from various clean energy projects and a global cost reduction plan initiated in June 2023. The company reported a decrease in sales volumes of 3%, attributed to the divestiture of its LNG business and lower global demand for helium. However, there were some positive contributions from the on-site business, particularly in the Americas and Europe segments. The company also noted a significant increase in costs due to inflation and maintenance expenses, which further pressured margins.

Looking ahead, Air Products anticipates continued challenges due to market conditions and the impact of its strategic decisions. The company expects to realize annual pre-tax savings of approximately $185 to $195 million from its global cost reduction plan. Additionally, it plans to maintain a capital expenditure budget of around $5 billion for fiscal year 2025, focusing on clean energy projects and core industrial gas operations. The outlook remains cautious as the company navigates through the implications of its recent strategic actions and market dynamics.