July 29, 2014 / 6:31 AM / 3 years ago

UPDATE 1-Linde Q2 profits weighed down by stronger euro

* Q2 oper profit 969 mln euros vs Rtrs poll avg 965 mln

* Q2 net profit 334 mln euros vs poll avg 316 mln

* Linde affirms outlook for 2014, 2016

* Shares indicated flat from Monday’s close (Adds further details on currency effects, CEO comment, background)

FRANKFURT, July 29 (Reuters) - German industrial gases maker Linde reported a decline in quarterly profits on Tuesday, hit by unfavourable foreign exchange rate fluctuations.

Second-quarter operating profit eased 4.3 percent to 969 million euros ($1.3 billion), in line with analyst expectations, as the Australian dollar, U.S. dollar, South African rand and emerging market currencies fell against the euro.

Excluding currency effects, operating profit would have been 0.6 percent higher, and Linde said it still expected earnings for the year as a whole to show a moderate improvement from 2013, which it has said implies an increase between 3.5 percent and 5.5 percent.

“We have proved our stability, although reported growth was again hampered by unfavourable exchange rate effects,” Linde’s new Chief Executive Wolfgang Buechele said in a statement.

Net profit was down 2.3 percent at 334 million euros, exceeding analysts’ consensus forecast for 316 million.

Buechele, who took the helm in May, faces the challenge of filling the shoes of long-time leader Wolfgang Reitzle, during whose 11 years as CEO the company’s market value rose sevenfold to around 28 billion euros.

Munich-based Linde said it still aimed to boost annual operating profit to at least 5 billion euros in 2016 from close to 4 billion last year, but repeated a warning that the figure may come in about 400 million euros lower than that if exchange rates remained as unfavourable as they were at end-2013.

Analysts gave an average forecast of operating profit rising to 4.02 billion euros this year and 4.65 billion euros in 2016.

U.S.-based rivals Air Products and Chemicals and Praxair last week both toned down their outlook for the full year, partly due to lower industrial activity in Latin America.

Top rival Air Liquide is due to publish first-half results on Thursday.

$1 = 0.7447 Euros Reporting by Maria Sheahan; Editing by Christoph Steitz and Mark Potter

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