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Italy's Prysmian CEO sees lower financial year profit on slow telecoms business

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By Reuters

MILAN (Reuters) – The chief executive of Italy’s Prysmian <PRY.MI> on Thursday gave guidance for lower core profit this year compared to an indication provided three months ago, due to a slower growth at its telecoms business.

The world’s largest cable maker confirmed its full-year 2019 target on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) at between 0.95 to 1.02 billion euros excluding effects of IFRS 16 accounting standards.

But CEO Valerio Battista told analysts in a post-earning call that adjusted EBITDA would come in the “bottom half of the guidance”, after saying earlier this year it would be at its upped end.

“The reason is the telecoms business,” he said.

Presenting its results for the January-September period, Prysmian said a slowdown in the telecoms business that began in the third quarter was “due primarily to the effect of stock realignment by various clients” and that it was expected to continue in the fourth quarter of the year.

Prysmian sales were almost unchanged in the first nine months of the year, missing expectations and sending its shares down earlier on Tuesday.

Prysmian said its sales grew only 0.3% to 8.64 million euros ($9.52 million), short of a company-provided market consensus of 8.77 billion euros.

Shares closed down 1.59% after trading broadly flat before the earnings’ release.

Negative growth in its projects business was caused by a low order intake in 2018, the timing of installations, and the phasing in of some projects, the company said, though adding an improvement was expected in the fourth quarter of this year.

Prysmian’s adjusted EBITDA came in at 773 million euros in the first nine months of this year, slightly missing a company-provided market consensus of 780 million euros.

They included a positive impact of 30 million euros from the application of the new IFRS 16 accounting standard.

(Reporting by Giulio Piovaccari; editing by David Evans)