Technip Energies shares drop as operating margins disappoint

Olivier Cherfan and Anna Peverieri
Updated 2-min read
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By Olivier Cherfan and Anna Peverieri

(Reuters) -Technip Energies shares fell on Thursday after the French engineering group reported that second-quarter operating margins came in slightly below expectations.

The company, which specialises in engineering and technology for the energy sector, reported an earnings before interest and taxes (EBITDA) margin for the second-quarter at 7.1%, below the 7.4% expected in a company-compiled analyst consensus.

The group reiterated its 2024 targets for an EBITDA margin between 7% and 7.5% on revenue of 6.1-6.6 billion euros ($6.58 billion-$7.11 billion), after confirming them in May.

J.P. Morgan said the second-quarter results were mixed, saying that the "modest" EBITDA margin miss and the (order) backlog due for execution in the second half of the year were "skewing FY’24 revenues towards the lower half" of the confirmed guidance.

"We're not very far ahead, we're good", said CEO Arnav Pieton when asked in a conference call whether the company's full-year guidance was conservative.

Technip's shares were down 4.2% at 1017 GMT, on track for their worst day since June 13.

Barclays said in a note published in July that the European energy services sector continued to see improvements with increased workloads, better pricing, and enhanced asset viability, and outperformed the global market in the second quarter of 2024 due to its non-U.S. exposure.

Pieton, speaking on the call, said the outlook for liquefied natural gas remained very strong. He also said data centres linked to the development of artificial intelligence needed energy produced by gas-fired power stations.

Adjusted order intake for the first-half reached 4 billion euros, supported notably by second-quarter major contracts in Abu Dhabi, Oman, U.S., India and Britain, while adjusted backlog reached 17 billion euros in the first-half against 15.7 billion in full-year 2023.

($1 = 0.9280 euros)

(Reporting by Anna PeverieriEditing by Marguerita Choy and Jane Merriman)