Tecnicas Reunidas (TRE) Q3 2024 earnings summary

Executive summary

• Order intake reached €4.1 billion for the first nine months of 2024, eliminating concerns about replacing sales with new awards and driving backlog to a record €12.4 billion, supported by major contracts in the US, Saudi Arabia, and Kazakhstan.

• Revenue for the first nine months was €3.2 billion, with EBIT of €131 million and a 4.1% margin, close to performance targets and up from 3.7% in 9M 2023.

• Net cash position stood at €298 million at the end of September 2024, up from €234 million a year earlier.

• Service contracts and low-carbon projects are increasingly significant, reflecting a strategic shift and growing demand, with low-carbon technology sales rising from €25 million to €94 million year-over-year.

• Focus on risk mitigation, successful project delivery, and expanding engineering services, with major project milestones achieved such as Bu Hasa mechanical completion and Suncor's cogeneration plant first fire.

Financial highlights

• Q3 2024 revenue was €1.1 billion, with EBIT of €47 million and a 4.2% margin.

• EBIT for the nine months grew 10% year-over-year; net profit increased by 58% to €65 million compared to the same period last year.

• Net cash increased 23% year-over-year, equity grew 19% to €564 million, and gross debt reduced from €769 million to €652 million.

• The €298 million cash balance does not yet include down payments from recent awards.

• Gross cash slightly decreased from €1,003 million to €950 million.

Outlook and guidance

• 2024 revenue guidance is set at €4.5 billion, with a targeted EBIT margin of 4% and gradual improvement to 5% by end of 2025.

• Optimism for continued positive trends, driven by strong market demand, record backlog, and customer trust.

• Strong commercial pipeline, especially in Europe, the Middle East, and the U.S., with a focus on petrochemicals, gas, and low-carbon technologies.