Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: How are you thinking about the cadence of earnings as it progresses through the year, given the solid results in 2Q and a steep ramp expected in 4Q?
A: (Seifollah Ghasemi - Chairman, President & CEO) The guidance for 3Q is lower due to major plant turnarounds in Europe and the US, which increases maintenance costs. For 4Q, we expect to bring several smaller plants online, benefit from productivity actions, and see strong performance in our LNG business, contributing to a stronger quarter.
Q: Can you elaborate on the cost reduction actions mentioned and how they are helping margin improvement?
A: (Seifollah Ghasemi - Chairman, President & CEO) The company is focused on improving efficiency and simplifying processes, which reduces costs. These productivity actions are across the board, aiming to do more with the same or fewer resources.
Q: With the Louisiana project producing 3.5 million tons of ammonia, is there sufficient demand for blue ammonia, especially considering the potential market size in Japan by 2030?
A: (Seifollah Ghasemi - Chairman, President & CEO) Not all hydrogen produced will necessarily be converted to ammonia due to significant demand for blue hydrogen through our pipeline network. The project's ammonia output might be less than 2.8 million tons, depending on hydrogen usage. Demand for blue ammonia is expected from power plant decarbonization and as a fuel for ships, with new regulations increasing demand.
Q: What caused the unexpected decrease in equity affiliates' income in Europe and the Middle East?
A: (Melissa N. Schaeffer - Senior VP & CFO) The decline is mainly due to timing and a one-time item from the previous year, along with higher interest expenses in the current quarter, impacting the Jazan joint venture.
Q: Can you provide an update on the Alberta blue hydrogen project and its expected startup?
A: (Seifollah Ghasemi - Chairman, President & CEO) The project is on track to start up in late 2025, and nearly all of its volume has been committed.
Q: Regarding the NEOM and Louisiana projects, have any offtake agreements been signed?
A: (Seifollah Ghasemi - Chairman, President & CEO) No contracts have been signed yet for these projects. The company is waiting to secure the right price, reflecting the value of being a first mover in green and blue hydrogen, before finalizing any agreements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
