Prysmian Down 20 Pct, Confirms Full-Year Guidance

Prysmian, the manufacturer of cables used in the energy and telecoms industries, has reported a drop in earnings for the first nine months of 2014 of approximately 20 percent.

Prysmian’s adjusted EBITDA amounted to €355 million (€442 million in the first nine months of 2013). Excluding the adverse impact of the Western Link project, Adjusted EBITDA would have been €438 million, basically in line with the first nine months of 2013.

Sales in the Submarine Cables and Systems business, penalised in the third quarter by the phasing of certain projects, are expected to recover in the fourth quarter. By way of confirmation of the Group’s strong position in this market, it expects to report double-digit organic growth for FY 2014, excluding the impact of Western Link. The Group confirms that the plan for resolving the Western Link problems is achieving the desired results and that the financial impact initially quantified has not changed (€94 million in 2014 and €167 million for the entire duration (2014 -2016).

The Group also confirms the positive trend in demand in the high value-added businesses of power transmission, particularly submarine cables, as well as consolidation of the upturn in demand for optical fibre cables. Despite the gradual deterioration in the economic environment over recent months, the results achieved in the first nine months of the year and the size of the current order book let the Group confirm Adjusted EBITDA for FY 2014 at the lower end of the target range of €506–€556 million (€600-€650 million excluding the negative impact of the Western HVDC Link project estimated at €94 million for FY 2014) compared with €613 million in 2013.

“The results for the first nine months of 2014 show generally stable profitability, excluding the adverse impact of the Western Link project,” explains CEO Valerio Battista. “The pace of volume recovery in the telecom cables business continues to exceed expectations, while the building wires market is showing a slight improvement in trend. For the fourth quarter, we expect high voltage and oil industry cables to make a bigger contribution than in previous quarters, and submarine cables to confirm their strong performance. Geographically, positive performance in North America and Asia has served as a partial counterbalance to the weak environment in Europe and deterioration in South America. The Group continues to focus on cost containment and making its manufacturing footprint ever more efficient, by initiating the implementation of a regional supply chain in Europe.”

The Group  has also continued with a new €40 million plan for the submarine cable plants in Arco Felice, Italy and Pikkala, Finland. There are also plans for further expansion of the optical cables plant in Romania.