Linde hikes earnings outlook amid soaring demand for oxygen tanks
India medical oxygen production up tenfold
Linde, the world's largest industrial gases company, hiked its 2021 earnings outlook on Thursday, as a strong performance in its healthcare business helped it beat first quarter forecasts.
The US-German company, which supplies gases such as oxygen, nitrogen and hydrogen to factories and hospitals, now expects adjusted earnings per share to rise 17%-19% year on year, compared with its previous forecast for 11%-13% growth.
Higher prices and growing demand in the healthcare sector — where Linde supplies equipment and medical gases including oxygen for Covid-19 patients — helped its sales in Europe, the Middle East and Africa jump 10% in the first quarter.
The pandemic has driven up demand for medical oxygen, particularly in India, where severe shortages and logistics problems have seen dozens of hospitals run short in recent weeks.
COO Sanjiv Lamba said that teams in India were now producing more than 3,000 tonnes of medical oxygen daily, nearly tenfold the figure four weeks ago.
“We've deployed about 1,200 drivers on the road, serving about 1,000 hospitals in the country,” he added.
Linde, India's biggest oxygen producer, and other suppliers are ramping up production to more than 9,000 tonnes per day by mid-May, an executive told Reuters last week.
Lamba noted similar challenges in Mexico, Brazil and other Latin American countries — where infections continue to spread, filling up intensive care units, even as restrictions ease.
Linde's overall earnings per share for January-March rose 32% to $2.49, beating analysts' average estimate of $2.26 and its own guidance.
Linde's biggest competitor, Air Liquide, also beat analysts' forecasts in April, driven by strong demand for medical oxygen and an industrial rebound in China.
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