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UPDATE 1-Finmeccanica maintains year forecast despite H1 profit drop
July 31, 2014 / 4:25 PM / 3 years ago

UPDATE 1-Finmeccanica maintains year forecast despite H1 profit drop

* H1 EBITA down 18 pct at 351 mln euros

* Core earnings hit by U.S. defence budget cuts (Adds details, share price)

MILAN, July 31 (Reuters) - Italian defence group Finmeccanica reaffirmed its full-year forecast on Thursday even though defence budget cuts, especially in the United States, pushed first-half core earnings 18 percent lower.

This is the first set of results under new Chief Executive Mauro Moretti, who was appointed by the government of Prime Minister Matteo Renzi earlier this year as part of a broad management reshuffle at state-controlled companies.

Investors are now waiting to hear how he plans to revive the heavily indebted company and a new business plan is expected by the end of the year.

In the first half the group’s core earnings before interest, tax, depreciation and amortisation (EBITA) fell 18 percent to 351 million euros ($470 million) on revenue down 1.1 percent at 6.6 billion euros.

New orders in the period amounted to 7.18 billion euros, up 43 percent on the first half of last year, whie the order backlog stood at 37.653 billion euros at the end of June, up 2.2 percent on the total at the end of December.

Net debt fell to 4.84 billion euros at the end of June from 5.2 billion euros a year ago.

Finmeccanica reaffirmed its targets set in March for the full year, including a rise in EBITA to 930-980 million euros from 878 million euros in 2013 and revenues falling to 13-13.5 billion euros from 13.7 billion euros.

Moretti, the group’s fourth CEO in three years, is seen giving Finmeccanica the stability to pursue the planned disposals and restructuring needed. Delivering on such plans would help the group to bolster its finances ahead of an expected consolidation in the aerospace and defence industries.

Since his arrival Finmeccanica has approved a plan to streamline the company and make its more efficient and indicated it would not backtrack from the sale of its loss-making train making unit AnsaldoBreda and of its stake in rail signalling firm Ansaldo STS, as initially feared.

Finmeccanica’s shares closed down 1 percent at 6.9 euros, compared with a 1.5 percent fall in Milan’s blue-chip index . ($1 = 0.7467 euros) (Reporting by Agnieszka Flak; Editing by Greg Mahlich)

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