BOC lifted by industrial demand
British industrial gases group BOC today said it had won a new 15-year deal with steel giant Corus as it reported a 4.5% increase in quarterly operating profits to £134m (€202m).
The Windlesham, Surrey-based company said it would increase its supply of oxygen, nitrogen and argon to the Corus Strip Products UK plant in Port Talbot, Wales by 30% under the deal.
The contract was among the highlights of an upbeat performance by BOC’s process gas solutions business, which supplies oxygen and other gases by pipeline to the oil refining, chemicals and steel industries.
The division increased third quarter operating profits excluding one-off items by 8% to £49.1m (€74.2m) in the three months to June 30, mostly on the back of improvements in existing business.
BOC, which employs 46,000 people and serves two million customers in more than 50 countries, said prices remained firm and further improvements in operating efficiencies helped to sustain margins.
UK tonnage volumes improved in the third quarter with increased activity at chemical and steel customers.
“This, together with improved plant reliability and productivity, contributed to increased operating profits,” BOC said.
The company said turnover and adjusted operating profits in its industrial and special products division, which supplies medical gases and other specialised products in cylinders, improved in the third quarter, but at a slower pace than in the previous quarter.
Results were better in Europe and the strong performance continued in the South Pacific region, but activity in the South African manufacturing and mining industries was restrained due to the strength of the rand.
Continuing business in the UK, Ireland and Poland increased and adjusted operating profits rose by 5% to £65.6m (€99.2m).
BOC said buoyant order intake during the quarter led to a further increase in adjusted operating profits from its BOC Edwards arm, which provides products and services to the semiconductor industry, although the weaker dollar continued to affect margins.
It said the worldwide outlook for industrial gases demand was positive with the exception of South Africa, where exchange rates continued to hamper activity in the export-oriented mining and manufacturing sectors.
“This should lead to further growth in turnover in BOC’s continuing gases business,” the group said.
