(Corrects backlog flow §11)

(Reuters) – Technip Energies on Thursday reported a 2023 operating margin forecast above expectations, despite revenue for the year seen falling, citing the impact of a project abandonment major liquefied natural gas (LNG) supplier in Russia.

The engineering and technology company says it expects an adjusted recurring Ebit margin of between 6.7% and 7.2%, after 7% in 2022, a result slightly above analysts’ expectations which expected 6.7%, according to a consensus provided by the company.

The Technip Energies stock took 7.62% to 18.03 euros at 09:41 GMT on the Paris Stock Exchange.

JP Morgan analysts, who on average expected a 6.4% margin for 2023, say they anticipate a recovery in orders in the Project Delivery segment, after a quiet 2022.

“The stock has been strong year-to-date (+23%), but overall the impression is good, with a favorable outlook for 2023 and the medium term,” according to JP Morgan.

While the withdrawal of the Arctic LNG 2 project had no impact on the group’s financial results last year, it weighs on the order book and the revenue outlook, said the group’s managing director.

“We had to interrupt the execution of the project during the year, so we have a partial year,” said Arnaud Pieton during a conference call with journalists.

The group’s financial director, Bruno Vibert, said for his part that the assets of Technip Energies had not been depreciated.

Technip Energies signed an agreement last October to exit in the first half of 2023 from the Arctic LNG 2 project led by the rogue gas group Novatek. At the end of 2021, Russian contracts represented 23% of the French group’s order book

Technip Energies adjusted revenue in 2022 was €6.4 billion, down 4% year-on-year, compared to a consensus of €6.5 billion according to data provided by the group.

For the current year, Technip Energies said it anticipates adjusted revenue of between 5.7 and 6.2 billion euros.

Adjusted order intake stood at 3.84 billion euros, far from the 9.78 billion euros recorded a year earlier.

Down 6% year-on-year, adjusted revenue for the Project Delivery segment stood at €5.02 billion in 2022.

The Technology, Products and Services (TPS) segment recorded an increase of 8% compared to 2021, to 1.4 billion euros.

The group reported an adjusted order book of 12.7 billion euros for 2022, a drop of 22% compared to 2021. On the adjusted order book, it plans to sell in 2023 5, 4 billion euros.

Technip Energies said it had proposed a dividend of 0.52 euros per share, up 16% year on year.

(Corrects backlog flow §11)

(Report Dina Kartit and Lina Golovnya; Jean Terzian and Kate Entringer, edited by Tangi Salaün and Kate Entringer)

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