(Adds CFO, CEO comments, details)
By Francesca Landini
MILAN, May 8 (Reuters) - Italian defence group Leonardo reported a solid start to the year on Wednesday with double-digit growth in new orders and revenue between January and March.
In the first quarter, earnings before interest, tax and amortization, or core profit, grew 6.5 percent to 163 million euros, driven by defence electronics and security
CFO Alessandra Genco told analysts she expected revenue would level off in the coming quarters after growing 11 percent to 2.73 billion euros.
Between January and March the state-controlled group secured new orders worth 2.5 billion euros, up 16.4 percent year-on-year.
They were mainly driven by the defence electronics and security business, which benefited from important contracts won by Leonardo’s U.S. unit DRS, and the helicopter division.
In particular, defence electronics and security business secured orders worth 1.51 billion euros, up 56 percent year-on-year, while helicopters won contracts for 688 million euros, with an increase of 13 percent.
Contracts for aeronautics shrank compared to last year, to 454 million euros.
“We are pleased with orders we received for helicopters ... they confirm the recovery path for the division,” Genco said, referring to difficulties at that division at the end of 2017, which were addressed last year.
CEO Alessandro Profumo said the group enjoyed a very good order backlog for all its helicopters, adding that customer support was also reporting a very good performance.
Net debt at end-March rose to 4 billion from 2.4 billion at the end of last year due to seasonal effects, the introduction of the new accounting standard IFR16 and the impact from the acquisition of Italian company Vitrociset.
Free operating cash flow was negative at 1.1 billion euros due to seasonal patterns.
Speaking on a post-results conference call, top executives said they were confident with their full-year guidance and did not see reasons to raise expectations for now.
“The first quarter is the smallest contributor to Leonardo’s yearly performance,” Genco told analysts.
In March, the Rome-based group said it expected new orders to reach 12.5-13.5 billion euros in 2019 thanks to the finalisation of major export orders.
It also forecast revenue to be in the range of 12.5-13 billion euros and EBITA to rise to 1.175-1.225 billion euros supported by both growth in volumes and cost cutting. (Reporting by Francesca Landini Editing by Mark Bendeich and Elaine Hardcastle)