12. March 2021 | 07:39 CET
Linde plc, Airbus SE, Royal Helium - Things are taking off!
Despite the second wave of the pandemic, the European Central Bank (ECB) has slightly raised its economic forecast for the eurozone economy, which has been battered by the Corona Crisis. The central bank announced on Thursday after the interest rate decision in Frankfurt that ECB economists now expect the gross domestic product (GDP) to grow by 4% for the current year. In December, central bank economists had still predicted 3.9%. So when the economy shifts into the next gear, commodity demand must be linked to this scenario. It provides a reasonable explanation for the bullish copper price. In this context, we take a look at the important industrial gases.
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ISIN: IE00BZ12WP82 , NL0000235190 , CA78029U2056
"[...] We expect the first three wells to be drilled, cased, completed and tested by the second week of March [...]" Andrew Davidson, CEO, Royal Helium Limited
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Linde plc - Ahead of the world with hydrogen
When we think of hydrogen, the stock market darlings of recent times come to mind first: NEL, Plug Power or FuelCell. But an absolute expert in the production of industrial gases is Linde plc - here we are not just talking about fabled investment budgets and government subsidy programs, no - Linde is researching and producing on a grand scale. In 2020, sales will reach EUR 27.2 billion, and profits will be around EUR 2.5 billion.
Linde is also looking after future projects, such as innovative ship propulsion systems. Together with the Norwegian shipping Company Norled AS, it is investing in hydrogen and will soon commission the world's first hydrogen ferry, MF Hydra, in Ryfylke, Norway. Linde Gas AS will supply the required liquid hydrogen and build and install the ferry storage facility. The MF Hydra ferry will initially go into service with a battery in the summer of 2021 and switch to hydrogen in the spring of 2022. The liquid hydrogen will come from Linde's large hydrogen plant in Leuna. Bunkering will take place on-site from the trailer to the tank onboard the ferry.
Linde already has a large production capacity to supply liquid hydrogen. The world's largest PEM electrolysis plant for green hydrogen, with a capacity of up to 24 MW, is currently under construction in Leuna. In 2020, Linde sold hydrogen worldwide for around NOK 20 billion and had over 80 electrolysers in operation. Linde shares continued their upward trend unperturbed, reaching the EUR 226 mark yesterday.
Airbus SE - Poor 2020 figures but a hopeful outlook
From a Corona perspective, one would consider Airbus SE's chances to be dramatically bad due to the aviation companies' tense situation. However, this is not entirely true because Airbus's line-up goes far beyond civil aviation; it goes into the aerospace and armaments industry.
In the wake of the Corona Crisis, which is not diminishing, and the planned cutbacks of thousands of jobs, Airbus reports a loss of billions for the previous year, as expected. In the fourth quarter, however, the aircraft manufacturer made it back into the profit zone. This year, the delivery of a similar number of aircraft is planned as in 2020, we learn at the press conference.
Thanks to the small profit in the fourth quarter, however, the bottom line for the year as a whole was only a loss of EUR 1.1 billion. Although this is far from the original expectations for 2020, it is significantly better than expected at mid-year. Despite the crisis, there was good news for Boeing's rival, where the business is picking up noticeably again after the scandal. The Corona Crisis, the debacle surrounding the 737 MAX crash jet and new delays to the 777X widebody jet left the US Group with a loss of more than USD 11.9 billion.
Airbus received more orders than cancellations last year and once again defended its position as the world's largest aircraft manufacturer. As was the case for 2019, shareholders are to forgo a dividend for 2020. The share price is rising again in the region of EUR 100; the high in 2020 was just under EUR 140.
Royal Helium - Political tailwind
Royal Helium Ltd. is getting a lot of attention from the political side. It's all about environmentally friendly resource development, of course, to reduce atmospheric pollution and make industrial processes cleaner. The Financial Post recently reported that many investors are putting money into a previously untapped resource that emits no carbon and could diversify Saskatchewan's economy.
Royal Helium is indeed a very dynamic proponent of these views, raising CAD 7.5 million from investors last year to drill three wells near Climax, Saskatchewan. The Company completed the wells last week in an area that is quietly becoming a center for helium production in Canada and representing an emerging industry. Another aspect should also be mentioned: The strong economic momentum of the past few months put the markets in excess demand for helium that current sources cannot supply.
"We have attracted the attention of these energy investors and have been able to demonstrate that everything you understand about the oil and gas sector can be applied equally in the helium sector - there is not a single difference in how you drill these wells," said Chief Executive Officer Andrew Davidson.
The North American helium market has been turned on its head in recent years after a 2013 law required the US government to sell its strategic helium reserve, which it has maintained since the 1920s in Amarillo, Texas. Helium is a gas that does not burn; it is used in MRI equipment to cool superconductors and purge gas for rocket engines. Helium is a necessary high-tech gas with multiple applications.
The Company currently has a capitalization of CAD 42 million, up from just CAD 15 million in December 2020. The market has recognized the relevance, and it is unlikely to get any cheaper.