Chart Industries has today (28^th July) strong Q2 2023 financial results, with record orders of $1.06bn, record total backlog of $3.96bn and record sales of $908.1m.

The US cryogenic equipment manufacturer said second quarter (Q2) 2023 backlog increased 24.1% compared to the second quarter 2022, and both Chart and Howden backlogs on a standalone basis were recorded as of the end of Q2 2023.

Q2 2023 sales of $908.1m grew 10.3% reported and 11.5% excluding foreign exchange impacts when compared to Q2 2022.

Chart also reported record gross profit of $280.6m and reported operating income of $95.7m for the quarter.

Reported EBITDA of $158.8m included record Howden standalone EBITDA; adjusted for one-time costs, adjusted EBITDA was a record of $195.3m and record 21.5% EBITDA margin.

Jill Evanko, CEO and President of Chart, said the company’s record backlog supports its near-term and medium-term outlooks.

She continued, “The Howden acquisition has exceeded our already high expectations at the time of purchase of the business metrics and synergy opportunities, with record Howden performance in Q2 2023.”

Highlights

For the quarter, Chart booked orders with 86 new customers, including an iron/manganese water treatment system for storm water from E&W Welding and an aerospace customer ordering its first liquid hydrogen trailer.

Chart also had 22 first-of-a-kind orders, including the largest cryogenic tanks ever ordered in the world for a space exploration customer and a novel fan design for a new metro train platform ordered by a global rail company.

Demand for hydrogen remains high across the gaseous and liquid hydrogen value chain, with more end-use applications entering Chart’s backlog. The US firm was recently awarded an order for a liquid hydrogen storage tank from Linde Engineering Hangzhou for a project located in Korea, a BAHX replacement for a US customer’s liquefier, and an order for a green hydrogen project to supply hydrogen compressors for Dalian Seawater Hydrogen Production Industry Integration Demonstration Project.

Chart’s commercial pipeline remains very strong with over $20bn of potential orders. Over $1bn in active sales pipeline are potential commercial synergy orders resulting from the Chart and Howden combination, and this is expected to continue to grow.

The company said it remains ahead-of-schedule on its cost and commercial synergies related to the Howden integration. The company reiterates its year-one cost synergy target of $175m and our year-one commercial synergy target of $150m, both of which could exceed between now and March 2024.

 Since closing on the Howden acquisition, Chart has signed new and expanded existing memorandums of understanding with 43 different partners which include both Chart and Howden content, representing significant order potential in both the near and long-term.

Outlook

Looking forward, Chart expects 2023 sales to be in the anticipated range of $3.66bn to $3.80bn, with associated adjusted EBITDA of $780m to $810m.

Chart’s 2023 outlook for adjusted diluted EPS is in the expected range of $5.70 to $6.70 on approximately 47 million shares outstanding.

2023 outlook for adjusted free cash flow is in the anticipated range of $300m to $350m, and our cash available for debt paydown is expected to be in the range of $655m to $705m.

The company’s guidance does not include any new big LNG orders, beyond what’s already in the backlog. However, Chart expects to book an additional big LNG order in the second half of 2023 and continues to expect ongoing big LNG demand in the years ahead.