Another provision on top of Q1''s Teesside In Q2, after the cost overruns on Teesside project in Q1, Tecnicas reported c.EUR60m generic provisions for potential negative outcomes associated with the pandemic from the final resolutions and claims to their clients. Additionally, the worsening of the COVID situation in the Middle East and India (+70% COVID cases increase from Q1 to Q2 21) impacted Adjusted EBIT negatively, which was close to 0% (vs 5.7% in Q1). While backlog continues to be robust, with more than EUR3bn awards and 2 new contracts to be announced in the coming weeks in Europe and Middle East (gas), sales came 12% below expectations. Cash not as bad as expected, though company calls on state aid Despite the weak numbers, Net Cash was at EUR94m, above the EUR18m we expected, thanks to a positive performance in working capital. However, the company has announced that it has asked for EUR290m from SEPI (Spanish state investment vehicle), comprising EUR150m as a shareholding loan and EUR140m as a normal loan. The maturity will be 4 years and the loan will not involve new equity. Guidance revised downwards. Limited visibility Sales guidance for this year was reduced to above EUR3bn vs c.EUR3.6bn and Adj EBIT margin at 3%, a figure which strikes us as challenging. Despite orders continuing to be strong (guided to EUR4bn) visibility remains limited in terms of backlog execution and margin levels. We delay expectation of recovery and cut our rating to Neutral We cut our estimates on further execution delays and assume 3% EBIT margin in 2023. Despite the heavy punishment of the market on Friday, we think that the company will not be able to show positive improvement until Q1/Q2 22. We cut our TP to EUR7.8/s, based on 2022 Cash adjusted PE. If we used 2023 figures for our valuation we would get a higher TP but the level of uncertainty does not allow us to look beyond 2022 with any degree of certainty. We cut our rating to Neutral.