Boosted by a record order book, engineering and services group Technip Energies announced on Thursday that it was revising upwards its operating margin for 2023, despite a 4.7% fall in first-half net profit linked to its withdrawal from Russia.
Technip Energies sales and earnings down in the first half of 2023
Year-on-year, however, the figures look grim: Technip Energies saw its sales fall by 13.1% in the first half of 2023, to 2.838 billion euros, and its net profit fall by 4.7%, to 125.3 million euros.
These declines can be explained “by the drop in Projects activity” (-27.3%) and “more specifically the exit from Russia and the abandonment of the Artict LNG2 project”, a huge liquefied natural gas (LNG) project that Technip Energies was carrying out with Russian company Novatek in Siberia, explained CFO Bruno Vibert at a press conference.
If it hadn’t been for the “revenue shortfall” resulting from this withdrawal, finalized in the first half of the year and a consequence of the war in Ukraine and European sanctions, “we would have been up”, estimated Technip Energies CEO Arnaud Pieton. This exceptional circumstance aside, the company, which employs 15,000 people in 35 countries, had an “extremely solid first half”, Mr. Vibert was pleased to report, with growth of 44.8% in its “Technology, products and services” business.
Technip Energies registers a record order intake of 9 billion euros and raises its guidance for 2023
The half-year was characterized by a “remarkable” order intake of 9 billion euros, driven in particular by the “major contract” for the North Field South (NFS) liquefied natural gas project in Qatar.
This will enable Technip Energies to boast a “record order book of almost 19 billion euros”, the “highest level reached since the company’s creation” in 2021, the press release boasts. This amount, “equivalent to three times our annual sales”, enables the company to raise its operating margin forecast by “30 basis points for the year”, from a range of 6.7-7.2% to 7.0-7.5%. Technip Energies expects “a growth in activity in the second half of the year compared to the first six months”, said Mr. Pieton, quoted in the press release, so that “we confirm our (sales) forecasts for the year”, between 5.7 and 6.2 billion euros.
