March 13, 2020 / 10:27 AM / a month ago

UPDATE 1-Leonardo restricts access to some plants due to coronavirus

(Adds quotes, details)

MILAN, March 13 (Reuters) - Italian defence group Leonardo has restricted staff access to some of its plants to protect employees and business from the coronavirus outbreak, and cannot rule out some temporary stops in production, its CEO said on Friday.

“We have created red areas, within selected plants ... to guarantee the production on critical business programmes,” Leonardo Chief Executive Alessandro Profumo said in a video posted on the company’s website.

However, the company said it could not exclude temporary and selective stops in production at some of its sites.

Rome-based Leonardo has nearly 40 production plants in Italy, which is grappling with the most acute coronavirus outbreak in Europe with more than 1,000 deaths and over 15,000 confirmed cases as of Thursday.

Looking to slow down the contagion, the government has ordered extensive curbs to people’s movements in the whole country and decided to stop activity in some airports.

“We are doing our best to maximise business continuity,” Profumo said, adding it was too early to assess the impact of the virus on 2020 financial and business outlook.

In a presentation for an analyst conference call on its 2019 results, Leonardo said it would update the market on coronavirus potential impact and recovery actions as soon as possible.

In the presentation the group also said it planned to invest around 600-700 million euros per year in the next five years.

On Thursday the state-controlled group reported revenue of 13.8 billion euros in 2019, up 12.6% year-on-year and driven by its defence electronics & security and aeronautics divisions.

Its core earnings, or EBITA, rose 12% to 1.251 billion euros. Both core earnings and revenue posted last year exceeded the group’s guidance.

Shares in Leonardo were up 10% at 6.33 euros by 1000 GMT after shedding 22% on Thursday when Milan’s blue-chip index fell 17% as investors fretted about the long-term economic costs of the virus. (Reporting by Francesca Landini, editing by Stephen Jewkes and David Evans)

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