Technip Energies missed profit forecast due to M&A costs and delayed investment decisions

Technip Energies, a French energy infrastructure company, reported a third-quarter profit that was below expectations. This sent its shares down, as the acquisition-related expenses and delayed client decisions on final investment investments weighed heavily on the results.

According to an internal consensus, adjusted recurring earnings (EBITDA), before interest, tax, depreciation, and amortization, were 159 millions euros ($185) for the quarter. This was below the average analyst expectation of 167 million euros. Bruno Vibert, finance chief of the group, said that the shortfall in earnings was due to the higher costs incurred by investments made into Technip’s textile-totextile recycling company Reju as well as the recent acquisitions of Ecovyst’s advanced materials business and catalysts. The Paris-listed company's nonrecurring expenses increased by over three times to 49.4 millions euros during the third quarter. This compares with 16.4 million euro a year ago.

Jefferies, in a note for investors, said that the net income was 20% lower than expected due to non-recurring expenses, while the order backlog was 16.8 billion euro, which fell short of analysts' expectations by 8%.

At 0945 GMT the stock had fallen 6%, making it the worst performing index in the SBF 120 of Paris's most traded stocks.

In a research note, RBC analyst Victoria McCulloch said: "We are cautious about the outlook for LNG sanctioning. This is based on the imminent LNG supply wave as well as the risk of further delays in US LNG projects."

She added that Technip's future growth will depend on the demand for its Technology, Products & Services division, which is tied to spending on energy transition.

Vibert stated that the TPS business, which generated 30% of the group’s revenue last fiscal year, was negatively affected by the delayed final investment decisions made in the third quarter. This was particularly true in the United States.

The CFO confirmed that Technip's forecasts for the year 2025 confirm the fact that the group expects its segment revenue to be at the lower end its range.

(source: Reuters)