MILAN (Reuters) -Italy’s Prysmian will benefit from the new copper tariff set-up in the United States, which sets levies on foreign-made cables, the group’s CEO said on Thursday, adding this could help the cablemaker further improve its full-year forecasts.
Prysmian produces in the United States the cables it sells on that market. Chief Executive Massimo Battaini said the new copper tariff scheme would bring a 50% increase in cost for importers of cables from countries such as Mexico, India, from Korea, which had until now been exempted from the 50% levy.
“We will not suffer the same cost disadvantage that those importers are going to suffer,” he said, presenting Prysmian’s second quarter results and a guidance upgrade for 2025.
“This will allow us to keep prices high.”
On Wednesday U.S. President Donald Trump signed a proclamation setting a 50% tariff on semi-finished copper products and copper-intensive derivative products from August 1, while exempting copper cathodes and other red metal input materials such as scrap, ores, concentrates, mattes and anodes.
“Now we are in a much stronger position than we were 24 hours ago. Much stronger,” Battaini said, adding that the new forecasts provided for 2025 might now look “conservative”.
He added, “We didn’t know about this tariff change until this morning. There is an opportunity for an upside.”
Milan-listed shares in the world’s largest cable maker were up 2.1% in early trading.
Analysts at Citi said copper tariffs would support pricing and margins in the U.S. low-voltage business.
“The United States is not self-sufficient in copper rod, whereas Prysmian is vertically integrated in copper rod production, meaning that it could benefit, should copper rod become a bottleneck,” they said in a note.
Earlier on Thursday, Prysmian guided for its adjusted core earnings (EBITDA) this year to rise to 2.3 billion euros to 2.375 billion euros ($2.63 billion to $2.72 billion), versus a previous forecast of 2.25 billion euros to 2.35 billion euros, as the company beat expectations for second-quarter results.
It also anticipated free cash flow of 1 billion euros to 1.075 billion euros this year, up from 950 million euros to 1.05 billion euros previously.
Prysmian said it improved full-year forecasts despite headwinds from a weaker dollar, thanks to a strong performance so far this year, supported by transmission and power grid businesses, and to contributions of recent M&A deals, including the $1-billion Channell acquisition, aimed at expanding its footprint in North America, its most profitable market.
Battaini said the efforts of Prysmian and of its lawyers in the United States helped nail down the new copper tariff scheme.
“We managed to see the administration reflecting a more fair approach to the tariffs,” he said. “We do expect the same logic, the same principle will also be applied to the aluminium finished product coming from overseas.”
Like copper, aluminium is a key material in cable production.
($1=0.8740 euros)
(Reporting by Giulio Piovaccari and Gnaneshwar Rajan; Editing by Lincoln Feast and Clarence Fernandez)
