First, our industrial gases business and technology solutions help customers across dozens of industries improve yield, increase production, reduce energy consumption, and lower emissions. In other words, to make more with less, while reducing the impact on the environment. Second, the world needs more energy and wants that energy delivered with a lower carbon footprint. At Air Products, we are demonstrating our leadership position, leveraging our decade-long experience, core competencies, core technologies, and our ability to execute world-scale hydrogen projects. By producing and delivering low and zero carbon hydrogen at the scale for heavy duty transportation and industry, we can meaningfully contribute to the goal of decarbonizing the world.
We believe that the first mover advantage will be substantial and deliver enduring long-term shareholder value, both in terms of return to Air Products and in generating a cleaner future for everybody. With that, we are now more than happy to take your questions.
Operator: Thank you. [Operator Instructions] And we’ll go first to Jeff Zekauskas from JPMorgan.
Jeff Zekauskas: Thanks very much. When did the Gulf Coast ammonia project come on and is that a meaningful income stream for you?
Seifi Ghasemi: Gulf Coast ammonia is consists of two different parts. One if the hydrogen plant and other one is the actual ammonia plant. I can comment on the hydrogen plant, because we own that and that is a sale of gas. That is on the stream and it’s producing revenue. And on the other part, I don’t want to comment, because we don’t own that facility and I like the owners to make a statement on that if it’s necessary.
Jeff Zekauskas: In the quarter there was — yes thank you for that. In the quarter the expense was materially higher year-over-year that your expectations for 2024, you have a large cost-cutting program. Heavy losses on sale of equipment would be smaller. There was significant room for improvement, particular line. Is that the case or things changed?
Seifi Ghasemi: Jeff, you are absolutely right that is the case. In the first quarter, our costs were higher, because of the sale of equipment issue that you mentioned. And we expect that in the — as we go forward, that would not be repeated and therefore our year-to-year costs will be lower as I had mentioned to you before.
Jeff Zekauskas: Thank you so much.
Seifi Ghasemi: Thank you, sir.
Operator: Thank you. We’ll go next to Mike Harrison from Seaport Research Partners.
Mike Harrison: Hi, good morning.
Samir Serhan: Good morning.
Mike Harrison: I was hoping that you could give a little bit more detail on what is going on within the helium business? Is that a situation where demand is lower or a situation where you guys are struggling to get the volumes of helium that you need? And also, which regions have the biggest exposure to helium? It seems like this is mostly an Asia issue at least in the first quarter?
Seifi Ghasemi: Thank you for the question and that’s an excellent question. Number one, we do not have any issues with having helium molecules for sale. We are actually the best — we have always been the supplier that has delivered helium to people when they need it, we have pattern, we have significant production facilities around the world, so we are a very reliable supplier and we have always been. The issue with helium is that number one demand is lower especially in electronics across the board and particularly in China and in Asia. And the other thing is that as I said we operate on the basis that we want value for the product that we are selling. So we have held on the pricing and whether we might have lost some market share, that is possible.
But we have no issues delivering the product, but we definitely see, as I said, a weakness in demand across the world. And in terms of Air Products, in terms of helium volumes, obviously Asia is a significant part of that. It’s not the other regions use a lot of helium too, but Asia is the biggest.
Mike Harrison: All right that’s very helpful and then my second question is related to your guidance. It looks like the implied guidance for the first-half of the year is around $5.50 in EPS and you’re expecting maybe something closer to $7 in the second-half? Can you talk about the visibility that you have that gives you confidence on a much better second-half and maybe help us bridge the improvement that you’re expecting in the second-half versus the first-half that, that $50 or so.
Seifi Ghasemi: That’s an excellent question. Obviously the guidance is what is our best estimate at this point, right? We can foresee the world events. But fundamentally, when you look Air Products during the years, we consistently deliver about 46%, 47% percent of the year results in the first-half, and we deliver around 53%, 54% in the second-half, so the second-half is usually our strongest quarter because of seasonality. So you should take that into account and then the other thing that we are right now by giving you the guidance is that we are expecting that in the second-half of the year some of the onsite projects that we have will be running very strong and therefore we will have a higher income from those. That is our estimate as of today. But how the world will turn, we’ll see. But that is how we bridge the gap of why we will be able to deliver the $7 versus the $5.50 in the first-half.
Mike Harrison: Thank you very much.
Seifi Ghasemi: Thank you.
Operator: Thank you. We’ll go next to John Roberts from Mizuho.
John Roberts: Thank you. Seifi, is the weakness in China also related to on-site operations? And maybe you could separate the gasifier business from other on-site?
Seifi Ghasemi: John, first of all, thank you for your question and I hope all is well with you. There is no weakness in on-site in China. You know, our on-site business is take or pay across the world, therefore we don’t see any issues there. The fundamental issue is on the merchant side and helium, and that is related to the economic activity. I just like to caution everybody on the call that the economic situation in China is not as robust as people might think. We, as you know, we make products that are used instantaneously. We are a great leading indicator. And things are not really that exciting, that part of the world.
John Roberts: Thank you.
Seifi Ghasemi: Thank you.
Operator: Thank you. We’ll go next to Steve Byrne from Bank of America.
Steve Byrne: Yes, thank you. I was just looking at the location of Jazan and it seems to be within 100 miles of quite a few of these recent strikes in Yemen and just wanted to ask, is everything there okay at the plant or do you see any access to labor or risks of this issue going on right now?
Seifi Ghasemi: Well first of all, up to now we have not seen any incidents none of these missiles and so on have been directed at the facility. So I mean, I can’t predict the future, but up to now there has not been any issues. The refinery is running fully our business — our investment I mean our performance there is great I’m very proud of our people. We are operating 16 gasifiers, which are the largest in the world for gas declined the bottom of the refinery and despite predictions for the worst those things are actually working and they are producing syngas, they are supplying hydrogen to the refinery and we are making close to 4,000 megawatts of power that is delivered to the Saudi grid. So up to now everything is fine. Thank you.
Steve Byrne: Very good. Thank you. And can you provide any more detail on the CapEx target for the year, the $5 billion to $5.5 billion. Can you just highlight what are the largest project within that list. I was just curious whether you are moving forward with the project in North Texas this year?
