UPDATE 1-Prysmian keeps full year outlook, shares jump
(Recasts with outlook, adds shares, comments)
MILAN Aug 1 (Reuters) - Italy's Prysmian, the world's largest cable maker, on Thursday confirmed its outlook for the full year, even though weakness in the construction sector hit its first-half result.
The group, which operates in 50 countries at 91 plants, said it expected to report adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year of between 600-650 million euros ($794-860 million).
The group achieved a full-year adjusted EBITDA of 647 million euros last year.
"We believe that the centre point of the guidance is a reasonable, good challenge for the group," CEO Valerio Battista said in a conference call.
Prysmian shares extended earlier gains after the results, closing up 7 percent at 16.35 euros, nearly a two-month high, and topping Italy's blue-chip FTSE MIB index.
"This company is perfectly capable of hitting at least the central part of the guidance on EBITDA at year end," a Milan-based analyst said, adding that he would keep a positive view on the stock.
The group, which manufactures cables used in the energy and telecoms industries, said adjusted EBITDA for the six months ended June fell 8.3 percent to 282 million euros ($374 million), as the economic crisis took its toll on construction.
The result was roughly in line with a consensus estimate of 280 million provided by the company, while sales fell 5.3 percent to 3.622 billion euros.
"Despite the beginnings of a stabilisation phase,(the market) remains difficult, especially because of the construction industry crisis in Europe and uncertainties over broadband stimulus programmes in North and South America," Battista added in a statement.
Battista said profitability was expected to improve in the second half, particularly thanks to the business for high voltage underground and submarine cables for power transmission, whose order book has risen to more than 2.8 billion euros.
The group added, however, that demand would remain weak for low and medium voltage cables for utilities and for building wires, while the business of onshore wind and solar power generation cables was also contracting, due to uncertainties around government incentives.($1 = 0.7557 euros) (Reporting by Agnieszka Flak and Massimo Gaia; Editing by Anthony Barker)