Chart Industries has reported a net loss of US$4.7 million for 1Q16, compared to a net income of US$5.2 million for 1Q15.
Net sales for the period fell 20.9% to US$193.8 million from US$245.1 million in the corresponding period of last year. Gross profit for 1Q16 was US$52.7 million vs US$72.5 million in the comparable quarter of 2015.
Sam Thomas, Chart’s Chairman, President and Chief Executive Officer, said: “We are pleased with demand strength for our LNG-related products in Distribution & Storage (D&S), including our contract for LNG vaporisers for an import terminal in India. Our D&S business is benefiting from greater availability of LNG worldwide, some of it coming from plants that Energy & Chemicals (E&C) has been helping to build. Despite the loss, which was largely due to acceleration of share-based compensation expense in the quarter, we continue to demonstrate the strength of our diversified product portfolio and strong cash flow generation despite low energy prices and a weak Chinese economy.
“We are focused on our long-term strategic initiatives and maintaining our engineering and execution capabilities, particularly in E&C. The start-up of our new E&C LifeCycle aftermarket service business to serve the significant installed base of E&C equipment is a prime example of how we plan to capitalise on our strengths by providing a well balanced portfolio of products and services. Lean initiatives, including our plant consolidation in Tulsa, Oklahoma, will allow us to improve our manufacturing efficiencies to reduce future costs.”
Orders received in 1Q16 totalled US$199.3 million, a decrease of US$31.9 million over orders received during 4Q15. Order levels significantly declined in the E&C segment due to continued uncertainties in the upstream energy markets. This decline was partially offset by solid order levels within D&S.
The company’s E&C segment sales decreased 56.6% to US$38 million in 1Q16 compared with US$87.5 million for the same quarter in the prior year. The decline was due to lower sales volume seen across all product lines in natural gas, petrochemical and LNG applications.
The D&S segment sales increased 2.3% to US$107.5 million in 1Q16 compared with US$105.1 million for the same quarter in the prior year. Sales in North America increased as a result of revenue recognised on projects related to both LNG and industrial gas applications. This increase was partially offset by continued weakness in Asia.
Based on 1Q16 results, current order backlog and business expectations for the remainder of 2016, Chart reiterated its 2016 guidance with sales expected to be in the range of US$900 million to US$1 billion.
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/28042016/chart-reports-1q16-results-2375/