Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Maire SpA (FRA:3OY1, Financial) reported strong growth in key financial indicators, with revenues up by over 30%, EBITDA by 40%, and net income nearing an 80% increase compared to the previous year.
- The company has improved its profitability and net cash position, driven by strong operating cash generation.
- Order intake for the first half of 2024 reached EUR3.4 billion, exceeding revenues and resulting in a book-to-bill ratio of 1.3, indicating strong market fundamentals.
- Maire SpA expanded its technology portfolio and engineering capacity through strategic acquisitions, enhancing its positioning in the energy investment cycle.
- The company returned over EUR110 million to shareholders through dividends and share buybacks, demonstrating a commitment to shareholder value.
Negative Points
- The company faces challenges in managing local content requirements and supply chain complexities in projects like Highland Garcia.
- There is a potential risk of scarcity of resources in the Middle East, which could impact project execution timelines.
- The market for renewable fuels is challenging, with major players like BP and Shell reconsidering investments, which could affect Maire SpA's projects in this sector.
- The company's financial results are impacted by derivatives related to the share buyback program, which may affect net financial income.
- There is uncertainty regarding future M&A activities, which could impact the company's ability to meet its CapEx guidance.
Q & A Highlights
Q: What challenges do you foresee with the Highland Garcia project, particularly regarding local content, and how are you addressing them?
A: Alessandro Bernini, CEO: We have a strong understanding of the local environment in the UAE, which helps us manage local content requirements effectively. We are ahead of schedule and have established relationships with reputable local suppliers and construction companies. The project is progressing well, and we expect to double the revenue contribution from Highland Garcia in the second half of the year.
Q: Can you elaborate on the expected CapEx for the second half of the year and potential acquisitions?
A: Fabio Fritelli, CFO: We anticipate around EUR 100 million in CapEx for the second half, including investments in pilot plants, R&D, and digital innovation. While some of this will be filled by planned investments, additional M&A activities may also contribute, though these are subject to negotiation outcomes.
Q: What are your expectations for the renewable fuels sector, given the current market challenges?
A: Alessandro Bernini, CEO: We focus on smaller projects that convert existing units into bio-refineries, which are more viable and provide good returns. We have several such projects in our pipeline, both in Europe and globally, and we believe these will proceed despite the current market downturn.
Q: How is the engineering capacity expansion progressing, and what is the market like for hiring engineers?
A: Alessandro Bernini, CEO: We have added 800 engineers this year, with 500 hired organically, mainly in India, and 300 through acquisitions in Italy and Poland. The market for engineering talent is competitive, but we are well-positioned to meet demand.
Q: Can you provide more details on the commercial pipeline, particularly the increase in Europe and the Caspian region?
A: Alessandro Bernini, CEO: The Caspian region is investing in petrochemical and fertilizer projects due to the shift in market dynamics. In Europe, we see opportunities in green projects like green ammonia and hydrogen, as well as infrastructure modernization in Eastern Europe.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
