Technip Energies trims 2026 outlook as Hormuz disruption delays revenue
French engineering and technology firm?Technip Energies lowered its full-year forecast on Thursday, citing disruptions caused by the Middle East conflict and closure of the Strait of Hormuz.
The company, which designs and delivers large energy infrastructure, including liquefied gas plants, is expecting revenue for its Project Delivery division in 2026 to be between 5.7 billion euro and 6.3 bn euros ($6.7 billion and 7.4 billion), down on a previous estimate of 6.3 to 6.7 bn euros.
The division will see a core margin, which is the ratio of earnings before taxes, depreciation, and amortization to sales of between?6.5% - 7.5%, as opposed to 8% in the past.
The lower end of its revenue range for Technology, Products & Services was also trimmed by 100 million euro, bringing it to between 1.9 billion - and 2.2 billion euro, but the EBITDA margins forecast for this unit remained unchanged at around 14.5%. Technip Energies is a major player in the Middle East, with LNG projects being undertaken by Qatar, Oman and the United Arab Emirates, as well as Saudi Arabia. Some of these sites have been temporarily stopped before resuming work.
In a recent press release, CEO Arnaud Piette said that if the Middle East situation normalizes before the end of second quarter, around?500 to?600 million in revenue would be deferred until 2026. The impact on the project margins, however, should be significantly mitigated.
Bruno Vibert, the finance chief at the Ministry of Finance, told reporters that "no contracts have been cancelled" as a result. He added that this is "just a shifting of revenue and activity from 2019 to 2027 or 2028."
The order intake for the quarter grew to 6.05 billion euro from 662.7 millions euros a year ago, thanks to major LNG and sustainable fuels awards. Backlog grew to a record of 20.2 billion euro.
Analysts' consensus estimates for the company's first-quarter revenue were 1.88 billion euro, but it was only 1.78 billion.
(source: Reuters)
