May 12, 2020 / 3:10 PM / 17 days ago

UPDATE 1-Italy's Prysmian withdraws guidance after Q1 earnings fall 15%

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MILAN, May 12 (Reuters) - Italy’s Prysmian on Tuesday withdrew its 2020 guidance after the novel coronavirus crisis triggered a 15% fall in first-quarter core profits, with the fallout expected to last into the second quarter.

However the world’s largest cable maker beat forecasts and its shares rose more than 5.5% to touch a session high above 19 euros after the results were published.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at 197 million euros ($214 million), versus a company-provided market consensus of 185 million euros.

Sales, albeit down 5.4% in the first quarter, also topped estimates, at 2,587 billion euros versus a company-provided market forecast of 2.5 billion euros. A “solid performance” in North America, where sales grew 3.6%, was driven by the Power Distribution business, it said.

The coronavirus crisis began to affect results in the final part of the first quarter Prysmian said.

Production and market demand in China were “severely influenced throughout the first quarter” it said, adding that south Europe and the United Kingdom, as well as the construction-related business, have been affected since the second week of March.

“The extraordinary impacts of the COVID-19 pandemic...will probably continue to unfold significantly in the second quarter,” Chief Executive Officer Valerio Battista said in a statement.

“Yet we are confident in the resilience of our organisation and our business”.

Prysmian said it was withdrawing full year guidance due to uncertainties over the spread and duration of the pandemic and the strength of future market recovery, adding it would provide and update as soon as it had greater visibility.

The company in March guided for an adjusted EBITDA of between 0.95 billion and 1.02 billion euros this year and for free cash flow of 330 million euros plus or minus 10%. ($1 = 0.9197 euros) (Reporting by Giulio Piovaccari; Editing by Kirsten Donovan)

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