Technip Energies falls as Mideast strike forces margin cuts for project delivery unit

Technip Energies, a French engineering company, cut its '2026 margin forecast for its Project Delivery Division on Thursday as Middle East disruptions and provisions drove quarterly core earnings far below market expectations. This sent its shares plummeting more than 15%. The adjusted recurring earnings prior to interest, taxes and depreciation fell 60%, falling to EUR63.5m ($72.3m), far below EUR152m expected by a company-compiled majority.

Analysts had expected EUR1.92 billion. Revenue increased 4% to EUR1.87 Billion. Technip's results have deteriorated since April when it largely attributed the Middle East conflict to delayed project activity and revenue. The company has recognised provisions for disputed items as well as additional logistics, safety, and business continuity costs.

Technip stated that its projects were fully mobilised in the region and the activity had stabilized. However, the extent and timing for cost recovery under contract protections will 'depend on the development of the conflict and discussions with the customers.

Bruno Vibert, Chief Financial Officer, told reporters that "where we have agreements with our clients, we've included the recovery." Where negotiations are ongoing, however, we don't assume any recovery.

The company has cut its EBITDA forecast for 2026 for the Project Delivery Division to above 5%. It was previously between 6.5% to 7.5%. However, it still expects revenue of EUR5.7 billion up to EUR6.3 billion.

It said that the revised outlook assumes the current operating conditions will continue through the end the year.

Project Delivery EBITDA dropped from EUR100.9 to EUR23.8 millions, and the margin of the unit fell to 1.7%, down from 7.6%. This is despite an increase of 7% in revenue to EUR1.42 Billion.

Technip raised its margin forecast for?its Technology, Products and Services Unit to around 15%, from 14.5%, following a quarterly EBITDA (EUR69 million) and a margin (15.4%).

The first-half order intake reached EUR12.7billion, which boosted the backlog to an?record EUR25billion, compared to EUR16billion at the end 2025. EUR14.4bn of this backlog are scheduled for 2028 or beyond.

(source: Reuters)