French oil and gas services provider Technip Energies announced on Thursday lower annual revenue and guidance for 2023, citing the impact of its exit from a major LNG project in Russia.
While the project withdrawal had no financial impact on the company in 2022, it cost a loss of order books and revenue, CEO Arnaud Pieton said in a call with journalists on Wednesday.
"We had to interrupt the execution of the project during the year, so we have a partial year," said Pieton, while the group CFO Bruno Vibert said in the call there was no depreciation of assets.
In October, Technip Energies signed a deal to leave the liquefied natural gas project (LNG) Arctic LNG 2 led by Moscow-listed gas producer Novatek in the first six months of 2023.
By the end of Dec. 2021, the Russian projects accounted for 23% of Technip Energies' order backlog. Annual adjusted revenue came in at 6.4 billion euros ($6.82 billion), down 4% from 2021 and below a company-provided consensus of 6.5 billion on average.
Adjusted order intake amounted to 3,845 million euros, far behind the 9.8 billion euros seen in 2021. The group's Project Delivery segment had annual adjusted revenue down 6% year-on-year, to 5 billion euros, but adjusted revenue for the Technology, Product and Service (TPS) branch was up 8% from 2021, to 1.4 billion euros.
In 2023, Technip Energies said it expected adjusted revenue of 5.7–6.2 billion euros and a recurring core margin of 6.7%–7.2%—both below 2022 guidance of 6.2–6.5 billion euros and 6.7%–6.9%.
The company estimates it will realise 5.4 billion euros from its adjusted backlog in 2023, after it ended 2022 with an adjusted order backlog of 12.7 billion euros, down 22% year-on-year.
In the medium term, the French group sees adjusted revenue in Project Delivery of 5-6 billion euros, and around 2 billion for TPS. Its total adjusted backlog is expected to drop further to 4.0 billion euros in 2024, and 3.3 billion in 2025+. The group proposed a dividend of 0.52 euros per share, up 16% year-on-year.
($1 = 0.9391 euros)
(Reuters - Reporting by Dina Kartit and Lina Golovnya)