Tecnicas Reunidas has announced the acceptance of a letter of intent for a contract aimed at the construction of the "onshore" facilities of a gas plant in the Middle East.
The project includes the engineering, procurement, construction and commissioning (EPC) of the infrastructure for the reception, processing and export of gas.
The contract, which will be signed under the "turnkey" model for a fixed price, has an approximate value of 1.650 billion dollars (approximately 1.430 billion euros) and accounts for 10% of the company's order book as of the end of 1S26.
Valuation:
We view the news as very positive. The awarding of a contract of this magnitude significantly strengthens the company's order book, providing greater visibility on revenues and workload for the coming years.
The project consolidates Tecnicas Reunidas' leadership position in the Middle East, one of its key geographical areas, and demonstrates the trust of major clients in the region in its technical capabilities to execute complex large-scale projects.
Although the contract is at a fixed price, which implies taking on certain execution risks, the company's extensive experience in EPC projects of similar characteristics should allow it to manage margins effectively. We reiterate the recommendation to Overweight and a Target Price of 39 euros/share.
