Another quarter without recovery, and getting into Net Debt position Tecnicas Reunidas results were weak again, with the absence of a contract in the quarter (Turkey and LatAm was announced in Q4 already), no recovery in EBIT and EUR90m Net Debt position for the first time ever. Sales dropped 2% in Q3, despite the easier comparison vs last year, while EBIT was EUR0m. Backlog reached EUR9.5bn at the end of Q3. Including the contract in Turkey and the new desulphuration unit in LatAm it will increase up to EUR10.4bn (EUR3.7bn order intake). Guidance points to delay in margin recovery Tecnicas guided to above EUR3bn sales and H2 21 EBIT at breakeven, with more than EUR4bn order intake. For 2022 TRE expects above EUR4bn sales and 2% EBIT margin and also above EUR4bn order intake. These figures were very much in line with consensus at the top line level, but clearly below in terms of margin recovery, as consensus expected a 2.8% EBIT margin for next year. For its Mid term target (beyond 2023) TRE expects sales above EUR5bn, in line with awards and EBIT margin c.4%. We see this as a challenge given the recent track record of the company. We adjust our figures We postpone some 2021 projects to 2022 (mainly the big M. East gas projects), and the same happens with sales. We reduce our adj EBIT margin estimate to 1.2% in 2021 and to 1.8% in 2022 (vs 2.7% previously in both cases). This has a limited impact on our valuation as we already reflected a weak debt and working capital for the year. Our TP is reduced to EUR7.6/s. No hurry to look for the upgrade There are no signs of recovery yet and after 4 years of disappointing results (and missed guidance) we need to see the turnaround point before becoming more optimistic. The company has signed the EUR340m financing with SEPI, which includes the possibility of EUR34m in equity in case there is a capital increase of the company.