MILAN (Reuters) -Italy’s Prysmian said on Thursday its core earnings jumped over 52% last year, with a sharp margin improvement, as the world’s largest cablemaker benefited from a move to greener energy and digitalisation.
Its shares extended their gains after the results were published, rising as much as 4.1% and outperforming the blue-chip index, which was down 0.6% at 1440 GMT.
Chief Executive Valerio Battista said in a statement the group was able to “fully seize” the opportunities offered by the energy transition, electrification and digitalisation.
The transition to green energy has lead to the expansion and upgrade of power grids and generation from renewable resources, boosting demand for cables. The expansion of online services has also increased demand for Prysmian’s products.
“The positive start to 2023 confirms the competitive positioning achieved and enables us to set the goal for 2023 of consolidating our 2022 record performance,” Battista said.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 1.49 billion euros ($1.57 billion) last year, topping its own forecast of 1.425-1.475 billion. The energy business contributed for almost two thirds of the result.
The full-year margin on adjusted EBITDA increased to 9.3% from 7.7%.
For 2023, the company on Thursday guided for adjusted EBITDA of between 1.375-1.525 billion euros, broadly in line with its 2022 result.
Free cash flow is seen between 450-550 million euros this year, just shy of last year’s generation.
As of 1440 GMT shares were up 3.4%.
Pricing power will also be a key element as Prysmian said it expected demand to remain virtually stable this year for its construction and industrial cables businesses.
Results “will depend on the capacity to implement pricing policies able to offset the impact on costs generated by inflation-driven pressures,” it said.
The company also proposed a 0.60 euro per share divided, 9% higher than the one it paid last year.
($1 = 0.9474 euros)
(Reporting by Giulio Piovaccari; Editing by Federico Maccioni, Jason Neely and Sharon Singleton)