Linde fights oil headwinds ahead of mega-merger

German industrial gases firm Linde on Thursday blamed low oil prices and exchange rates for falling revenues in 2016, as it plans to seal a massive US merger within months.
The group reported net profits of 1.3 billion euros ($1.37 billion), slightly outstripping analyst predictions and a 7.3-percent improvement on 2015's figure.
At 4.1 billion euros, the group's operating, or underlying profit was also slightly better than forecast.
But revenues fell short of the previous year as well as analysts' and the firm's own forecasts, at 16.95 billion euros.
"Compared with the previous year, lower income at the engineering division contributed to the trend in revenue, as did negative changes to exchange rates," Linde said in a statement.
Looking ahead to its planned merger with US-based Praxair, Linde said that preparations were "in full swing".
The group expects to have a final version of the $65-billion deal on the table by "late April or early May", it said.
If it goes ahead, the tie-up will create the largest industrial gases firm in the world, overtaking the German firm's historic French rival Air Liquide.
Obstacles have been thrown in the merger's path by German workers' fears for their jobs if the joined firm is managed as planned from the United States.
In its existing business, low oil prices have led to less demand for the industrial equipment Linde's engineering unit produces for the oil and gas industry.
Sales and operating profit in the segment both fell by more than 9.0 percent.
By contrast, Linde was able to increase operating profit at its gases division even with falling revenues -- which at 14.9 billion euros accounted for the majority of the group's sales.
Defying the headwinds, Linde plans to offer shareholders a dividend of 3.70 euros per share, a 7.2 percent increase on 2015's payout.
The group expects "challenging market conditions" to continue in 2017, saying revenues could end the year up or down by up to 3 percent, but said operating profits "could increase up to 7.0 percent" over last year.

Source : AFP