CM-ENERGY (00206) issues a profit warning, expecting a mid-term loss of approximately 9.3 million USD, shifting from profit to loss year-on-year.

CM-ENERGY (00206) announced that it expects to report a loss of approximately $9.3 million for the six months ending June 30, 2026, compared to a profit of about $2.78 million for the six months ending June 30, 2025. The Board of Directors believes that the anticipated shift from profit to loss is primarily due to the company's expectation of recognizing an impairment loss provision of approximately $9.5 million for ongoing projects during the six months ending June 30, 2026. The main reason for the provision relates to the recent termination of the unexecuted portion of the project involving cooperation with Petrleos Mexicanos (Pemex) regarding drilling and equipment supply and services, following the completion of several independent milestones. Pemex is a state-owned oil and gas company in the United Mexican States and is one of the largest oil companies in the world. Given the local business and macroeconomic environment, changes in the management, business strategy, and treasury practices of Pemex have led to stricter budget constraints across its projects. The slow payment progress from Pemex to the group has affected project timelines while the group continues to incur expenses. The group has made every effort to negotiate with Pemex to facilitate the normal progress of the project, but ultimately did not achieve the desired effect. After considering the current situation and operational risks, all parties decided not to proceed with the remaining parts of the project to avoid continued significant expenses for both sides. In this regard, the company expects to make a one-time provision, primarily for the costs incurred for the entire project (excluding completed milestones). The group is still in close consultation with Pemex and will do everything possible and take appropriate measures to recover the outstanding contract amounts for the project (such amounts have been confirmed by Pemex). According to the preliminary analysis conducted by the group, the overall returns from the prematurely terminated project (including contract amounts) can offset most of the costs and expenses incurred, resulting in only relatively minor estimated losses. In light of this, the company believes that terminating the project is a strategic decision aimed at controlling the groups financial and operational risks and aligns with the overall interests of the company and its shareholders.