Air Products and Chemicals, Inc. (NYSE:APD) Q1 2023 Earnings Call Transcript

Dr. Samir Serhan: Steve, you’re asking a very good question, which is subjective in general discussion cloud event. We are — this is the first significant project that we are doing for green. We are obviously installing a significant amount of wind and solar capacity and we are installing a significant amount of electrolyzer capacity. What these electrolyzers and wind and the solar we do actually might end up giving us the capability of making a lot more than the $1.2billion. But I don’t want to get ahead of ourselves. I don’t want to promise that, but you are on the right track that there might be an upside in that side. And I personally understand there could be an upside, but we have to wait and see. Thank you.

Seifi Ghasemi: Thank you.

Operator: We will take our next question from Mike Leithead with Barclays.

Mike Leithead: Great. Thanks. Good morning, guys. First question is on the — on the new $8.5 billion kind of oven CapEx number. Can you just give us some comfort of framework around how walked in, that number is obviously, there is still about 70% or so, the engineering works left. Just any comfort around now what you’re doing to make sure that number is not going to move again, say, in the next three years.

Seifi Ghasemi: At this point I can say that we had an off contingency there. And we have done enough work that I think that’s a pretty good number. But nothing just 100%, but I feel pretty good about that number at this stage.

Mike Leithead: Got it. Makes sense. And then

Seifi Ghasemi: underlying, who is in charge of our — all of our engineering and all of that. But I think pretty comfortable that, that is a good number. We spend a lot of time making sure that when we are doing project financing that we don’t have to go back for additional financing, but we feel pretty good about the number at this stage. Besides the engineering, we haven’t add the page made the major orders on the project. So basically, that’s also much then for like and even for construction for the green element that’s also being replaced.

Mike Leithead: Great. Thank you. Yes. And just as a quick follow-on with the new capital structure, that obviously can sometimes come with some level of covenants or restrictions around distribution. So just how should we think about the cash dividends from the project? Should they generally match income? Or are there some constraints or restrictions around the cash you can get back to their products.

Seifi Ghasemi: For the cash income from the project itself, obviously the project will have a cash flow that we’ll go to servicing the debt and if there is any extra of that, which I hope there is, that will come back to the shareholders. That’s the major structure .

Mike Leithead: Got you.

Seifi Ghasemi: Thank you.

Operator: We will take our next question from Kevin McCarthy with Vertical Research Partners.