Published by Global Banking and Finance Review
Posted on February 27, 2025
MILAN (Reuters) - Italy's Prysmian on Thursday guided for an increase of its core profit of as much as 22% this year, a forecast some analysts said was conservative while the industry faces potential U.S. tariffs on copper and aluminium.
Shares in the world's largest cablemaker were down 7.5% to 60.14 euros by 1040 GMT. They hit an all-time high at 72.76 euros in January.
The company, which manufactures cables for energy transmission, power grids and digital systems, said it expected full-year adjusted core earnings (EBITDA) of between 2.25 billion and 2.35 billion euros ($2.35-$2.46 billion) in 2025, up from 1.927 billion euros in 2024.
The guidance is slightly below consensus, analysts at Citi and broker Equita said.
Targets for 2025 include cash generation of up to 1.05 billion euros, broadly unchanged from 2024. They are based on "solid market trends in electrification, energy transition and digitalisation" and on full benefit from the $4.2 billion Encore Wire acquisition in 2024, the company said.
CEO Massimo Battaini downplayed the impact on profitability from potential U.S. tariffs on copper and aluminium, two key materials for cable manufacturing. The U.S. does not produce enough copper or aluminium ore and tariffs would also affect competitors, he said.
"Everybody will probably have to deal with the same situation ... which means that those import duties will be naturally passed on to the market," Battaini said.
Prysmian will hold an investor day at the end of March to update its long-term targets following the acquisition of wire and cable maker Encore, which it completed at the beginning of July.
The company, which is also considering a secondary listing in the U.S., is open to other mergers and acquisitions, with North America its main focus.
"We still have sufficient room in our financial position to accommodate ... a mid-size acquisition," Battaini said, adding that for a larger deal, of a size similar to Encore, Prysmian will have to wait until 2027.
($1 = 0.9556 euros)
(Reporting by Giulio Piovaccari, editing by Giulia Segreti, Valentina Za, Editing by Louise Heavens)
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