Técnicas Reunidas: Powering up as the Middle East reopens
For a company that spent 2025 wrestling with working capital and conflict-related provisions, Técnicas Reunidas' second-quarter results are a decisive shift in tone. The numbers themselves are clean: EUR 73 million EBIT, a 5% margin, EUR 1,478 million in sales, and EUR 344 million net cash – with zero provisions. But the real story is the step change in the order book and the confidence around it.
A Q2 that speaks in big numbers
The Chairman opened the call with a simple message: “EUR 73 million EBIT signifies 5% of our sales, a decent level of sales of EUR 1,478 million and a net cash of EUR 344 million. And very important here, 0 provisions.” — Juan Llado Arburua, Chairman · 2026-07-30 That zero is the first signal that the Middle East projects are moving back to normal – and that the worst of the conflict-driven extra cost may be behind. The company maintained its EUR 45 million provision, but only after revisiting the analysis and concluding the conflict will end this quarter. As CEO Eduardo San Miguel put it, “based on the premise that the conflict ends in this third quarter, we consider the EUR 45 million provision is still correct.” — Eduardo San Miguel Gonzalez De Heredia, CEO · 2026-07-30
The order intake is where the narrative turns from recovery to acceleration. A EUR 5 billion sole-contractor award from ADNOC and ExxonMobil in the Middle East – with the Chairman noting both customers “understand extremely well our engineering capacity and our engineering quality” – is the kind of anchor that transforms the pipeline. Add to that a power project in Alberta with Siemens turbines and Meta as the end customer, and you have the three pillars of the growth story: Middle East investment, power, and North America.
The power engine
The most striking new theme in this call is the scale of the power strategy. TR Power, the spin-off, is now targeting EUR 2 billion in annual revenues – double what the company forecasted at its October Investor Day. “If we continue securing awards at the pace we are currently doing, EUR 2 billion revenues per year should not be a great challenge,” Eduardo San Miguel said. The backlog already sits at EUR 2.2 billion, with another EUR 1.1 billion project in the Emirates expected to get final notice to proceed by October, and EUR 1.5 billion of RWE combined cycles in Germany awaiting conversion.
The driver is clear: data centers and the electrification of everything. The company is doubling its power workforce to ~1,500 people, with recruitment concentrated in India – a nice example of how it is scaling the engineering bench without blowing up costs. And North America is becoming a genuine second leg, with early engineering services already reaching EUR 52 million in H1 and an expected EUR 8 billion of EPCm awards over 2027-2028.
We're extremely well positioned, very well positioned in 3 very important business segments, extraordinary business segments, well positioned in the Middle East investments that are taking place. We're very well positioned in the Power investment cycle, Europe, Middle East and most important, North America.
Middle East normalization
Of course, the Middle East remains the swing factor. The company has been remarkably transparent about the conflict impact, and the 2026 outlook still assumes EUR 6.5 billion in revenues. The client relationships are the key buffer: “The richest clients tend to help us as much as they can,” Eduardo noted, and the big awards are confirmation of that support. The Middle East investment mood is not just about rebuilding – it's about massive new capacity. The Chairman's closing was almost a mission statement for the next 18 months.
On the digitalization and AI front, the company is also pushing forward – the Artificial intelligence and robotics initiatives are expected to generate cost savings of 1.5% of revenues, a figure the CEO called “not a major challenge.” With EUR 40 million invested in 2026 and 400 professionals dedicated, this is a margin story that should compound over time.
For investors, the question is whether the 2028 guidance (EUR 4.5 billion EPC revenues) is now obsolete. The CEO acknowledged a revisit is needed: “Obviously, it's not going to be EUR 4.5 billion.” With a pipeline that has already produced EUR 6 billion in awards in H1 and a target of EUR 8 billion for the full year, the company is effectively re-rating its growth path. Prior management consistently under-promised and over-delivered – as one analyst noted earlier this year, “we have quite good clear visibility about those EUR 7 billion” — Eduardo San Miguel Gonzalez De Heredia, CEO · 2026-02-27 – and the market is starting to price in that pattern.
The tape, however, remains silent for now; the price action data is not yet captured in this dataset. But the fundamental story is compelling: a mid-cap E&C that has found a way to monetize two of the strongest secular tailwinds (power and Middle East capex) while keeping the balance sheet conservative. If the backlog conversion and the conflict resolution play out as management expects, 2027 could be a breakout year.