Italy's Prysmian posts 52% profit jump, sees 2023 dependant on price softening

MILAN (Reuters) -Italy's Prysmian said on Thursday its core earnings jumped over 52% in 2022 but cautioned ongoing price softening, especially in North America, could lead its result to remain practically unchanged this year.

Shares in the world's largest cablemaker rose as much as 4.1% after the results and closed up 3.1% as Milan's blue-chip index fell.

As Prysmian benefited from a global move to greener energy, electrification and digitalisation, its 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 billion-1.475 billion.

The energy business contributed almost two-thirds of the result.

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 company gave guidance for 2023 adjusted EBITDA of between 1.375 billion-1.525 billion euros, broadly in line with its 2022 result.

UNCERTAIN LANDING POINT

CEO Valerio Battista told analysts that, after the strong upside of last year, the company was seeing some of its product prices and margins scaling down at the beginning of 2023 especially in the U.S., though not collapsing.

"But their evolution along the year is very difficult to predict," Battista said.

He added this was also linked to U.S. Inflation Reduction Act (IRA) and Washington's actions to repatriate strategic production to the U.S.

"If (prices and margins) stay where they are, the top of the guidance may be reachable. If we turn back to the level of, I don't say, 2019, but something like that, we are going to suffer much more," Battista said.

Prysmian sees its cash flow between 450 million-550 million euros this year, just shy of last year.

($1 = 0.9474 euros)

(Reporting by Giulio Piovaccari; Editing by Federico Maccioni, Jason Neely, Sharon Singleton and Cynthia Osterman)