By Giulio Piovaccari
MILAN (Reuters) -Prysmian, the world’s largest cable maker, beat forecasts on Thursday with a 28% jump in first-quarter core profit, supported by its transmission business and last year’s acquisition of Encore Wire.
CEO Massimo Battaini said the group’s industrial and construction (I&C) division, its largest by revenue and core profit, saw a “solid rebound” in March after a slow start to the year due to bad weather, weaker pricing and higher metal prices.
“March has seen a restoration of the previous trends and an improved trend, while April was probably one of the best months ever for Encore Wire, in our I&C perimeter in North America,” he told analysts on a call.
He added Prysmian made “a big price increase in March, which is being followed by all competitors”.
Prysmian announced the $4.2 billion purchase of U.S.-based Encore Wire in April last year and completed it at the beginning of July.
The CEO’s comments helped the company’s Milan-listed shares to extend gains after an initially muted response as analysts noted weak margins at Prysmian’s electrification business, of which the I&C division is the main part.
At 0925 GMT, the shares were up 5.7%.
In January-March, Prysmian’s adjusted earnings before interest, taxes, depreciation, and amortization rose to 527 million euros ($596 million), above analysts’ consensus estimate of 510 million euros in a company poll.
Revenues rose 5% on an organic basis, driven mainly by its transmission business.
The company confirmed its forecasts for full-year results, provided in February.
“The market is certainly dynamic, there are certainly some headwinds”, including from the euro/dollar exchange rate, Battaini said. Despite this, guidance is “still achievable, still within our reach”.
However, he added that Prysmian would review its full-year forecasts once it completes the purchase of U.S. connectivity device manufacturer Channell, for up to $1.15 billion, a deal it announced in March along with its business plan to 2028.
The Channell acquisition is expected to close at the beginning of June, Battaini said, putting Prysmian in a position to potentially review full-year guidance in July, when it announces second-quarter results.
($1 = 0.8849 euros)
(Reporting by Giulio Piovaccari. Editing by Rashmi Aich and Mark Potter)
