Prysmian’s Half-Year Results Show Improvement from Second Quarter

Prysmian's Half-Year Results Show Improvement from Second Quarter

The Board of Directors of Prysmian S.p.A. has approved the Group’s consolidated results for the first half of 2013.

“The Group’s half-year results show signs of improvement from the second quarter. In fact, in the second quarter 2013 both sales and profitability increased on the first quarter 2013, while still remaining below the same period in 2012,” explains CEO Valerio Battista. “These signs acquire special relevance in a market scenario that, despite the beginnings of a stabilisation phase, remains difficult, especially because of the construction industry crisis in Europe and uncertainties over broadband stimulus programmes in North and South America. Profitability is expected to improve in the second half, particularly thanks to high voltage underground and submarine cables for Power Transmission, whose order book has risen to more than €2.8 billion. With the goal of achieving the expected full-year targets, the Group also confirms its focus on cost containment and rationalisation of organisational and production structures, as well as on the synergies with Draka, recently revised up to €175 million. Lastly, we are also expecting to see results from the commercial initiatives to leverage the product portfolio and improve customer service.”

Financial results

Group Sales amounted to €3,622 million compared with €3,916 million in the first half 2012. Assuming the same group perimeter and excluding metal price and exchange rate effects, the organic change was a negative 5.3%, even if sales showed some recovery in the second quarter. The positive performances reported by Power Transmission cables and by cables for higher value-added Industrial applications, have allowed the Group to limit the effects of lower volumes for building wires (sold through the Trade & Installers channel) and for industrial renewable energy cables in Europe and of the drop in demand for optical cables on the American continent. Market conditions remain generally difficult, despite signs of stabilisation that are thought could be confirmed in the second half.

Adjusted EBITDA amounted to €282 million, compared with €308 million in the corresponding period of 2012 (-8.3%), with a basically stable margin on sales (7.8% vs 7.9%). The trend towards stabilisation and improvement in performance in the second quarter were also reflected in the profitability measures, with second-quarter Adjusted EBITDA rising to €167 million from €115 million in the first quarter. Expectations of further market stabilisation and the robust Power Transmission order book, which climbed to a record level of more than €2.8 billion at the end of June 2013, allow the Group to confirm its full-year guidance, with Adjusted EBITDA forecast in the range of €600-€650 million.

EBITDA amounted to €256 million, compared with €266 million in the first half 2012 (-4.0%), reflecting the impact of €26 million in non-recurring expenses particularly in relation to reorganisation and manufacturing efficiency projects.

Adjusted operating income amounted to €204 million, compared with €229 million in the first half 2012 (-10.5%). Operating income was €134 million, compared with €178 million in the first half 2012, partly due to the negative change of €37 million in the fair value of metal derivatives (versus a positive change of €1 million in the first half 2012).

Net finance income and costs, including the share of income/(loss) from associates and dividends from other companies, reported a negative balance of €76 million, compared with €51 million in the corresponding prior year period. Of this increase, €20 million is due to a number of non-recurring non-monetary costs, connected with the partial refinancing of the Term Loan by issuing the Equity-linked Bond.

Adjusted net profit amounted to €115 million, compared with €129 million in the first half 2012 (-10.9%); the margin on sales was broadly stable at 3.2%, compared with 3.3% in the corresponding period of 2012. The Net result was a profit of €41 million compared with €89 million in the first half 2012; this decline was mainly due to the negative change in the fair value of metal derivatives as well as to the non-recurring costs associated with the Term Loan’s partial refinancing.

Net financial position at the end of June 2013 amounted to €1,248 million, a significant improvement on €1,396 million at 30 June 2012 (€918 million at 31 December 2012), having been particularly affected by the following factors:

– positive cash flow from operating activities (before changes in net working capital) of €215 million;

– negative impact of €367 million from changes in working capital, due to the seasonality in stock levels and strong growth in working capital in the submarine cables business;

– payment of €28 million in taxes;

– net operating investments of €50 million;

– receipt of €8 million in dividends;

– payment of €72 million in net finance costs;

– payment of €91 million in dividends (€45 million in the first half 2012)

 Full results

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Press Release, August 02, 2013