Tecnicas Reunidas (TRE) Q2 2024 earnings summary

Executive summary

• Launched the SALTA strategy to double operating margins to 8% by 2028 and reach €5 billion turnover, focusing on de-risked, digitalized EPC, expanding service contracts, and strategic alliances, notably with Sinopec.

• Backlog reached €10.96 billion, up 19% year-over-year, with €1.4 billion in new orders, including major US petrochemical and Saudi Aramco projects.

• H1 2024 sales totaled €2.1 billion, down 4% year-over-year, but Q2 sales rose 9% sequentially to €1.1 billion.

• EBIT for H1 2024 was €84.2 million (4.0% margin), up 9% year-over-year; net profit reached €42 million.

• Net cash position at June 2024 was €318 million, up from €241 million a year earlier, with gross debt reduced by €63 million in H1.

Financial highlights

• H1 2024 net revenues: €2,094 million (down 4% year-over-year); Q2 2024 sales: €1,091 million (up 9% sequentially).

• EBIT: €84.2 million (4.0% margin), up 9% year-over-year; EBITDA: €99.2 million, up 10% year-over-year.

• Net profit: €42.1 million (2.0% margin), up 9% year-over-year.

• Order intake for H1 reached €1.4 billion.

• No dividends declared or paid in H1 2024 due to SEPI loan conditions.

Outlook and guidance

• 2024 guidance targets €4.5 billion in sales and a 4% EBIT margin, with a focus on quality backlog and selective project approach.

• The SALTA plan aims for EBIT of €380 million and sales of €5 billion by 2028, with an 8% EBIT margin target.

• Shareholder remuneration policy to resume, targeting at least 30% payout in 2026.