TechnipFMC Spikes 11% After-Hours On $1B+ Egypt Contract

Shares in TechnipFMC (FTI) spiked 11% in Tuesday’s after-hours trading after the company announced a major Engineering, Procurement, and Construction (EPC) contract with Assiut National Oil Processing Company (ANOPC) for the construction of a new Hydrocracking Complex for the Assiut refinery in Egypt.

TechnipFMC clarified that a “major” contract is over $1 billion.

The contract covers new process units such as a Vacuum Distillation Unit, a Diesel Hydrocracking Unit, a Delayed Coker Unit, a Distillate Hydrotreating Unit as well as a Hydrogen Production Facility Unit using TechnipFMC’s steam reforming technology. The project also includes other process units, interconnecting, offsites and utilities.

According to the statement, the plan is to transform lower-value petroleum products from Assiut Oil Refining Company’s (ASORC) nearby refinery into approximately 2.8 million tons per year of cleaner products, such as Euro 5 diesel.

“This award demonstrates TechnipFMC’s long-standing relationship with the Egyptian petroleum sector and strengthens our expertise in the delivery of complex projects in the country” commented Catherine MacGregor, President of Technip Energies.

She added: “Assiut is considered one of the major strategic projects needed to meet growing local demand for cleaner products, and we are extremely honored to have been selected by ANOPC to contribute to the largest refining project to be implemented in Upper Egypt.”

TechnipFMC says it is currently working with ANOPC to complete the remaining conditions precedent so that the project can start.

Shares in FTI have plunged 67% year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on the stock- with 10 recent buy ratings, 3 hold ratings and 1 sell rating. That’s with a $10 average analyst price target (40% upside potential). (See FTI stock analysis on TipRanks).

On the bull side comes RBC Capital Kurt Hallead with a buy rating and $12 price target. “FTI offers an absolute and relative value proposition for investors who are willing to focus on mid-cycle earnings power post the COVID-19 and oil price collapse challenges” the analyst stated, noting that the company has a strong balance sheet and ample liquidity.

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