March 5, 2020 / 7:08 PM / a month ago

UPDATE 1-Italy's Prysmian says coronavirus and tariffs will halt profit growth

(Adds details from conference call, changes headline)

MILAN, March 5 (Reuters) - Italian cable maker Prysmian warned on Thursday that core profit would not grow this year after global trade tensions led to higher tariffs, with performance also likely to be hit by knock-on effects from the coronavirus outbreak.

Prysmian, which manufactures cable for multiple sectors, from energy to transportation, said it expects a continuing slowdown in telecoms business, hit by lower volumes, price pressures and coronavirus developments in China.

“The telecoms business is the bad guy of the group,” Chief Executive Valerio Battista told analysts in a post-results call.

Prysmian forecast that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) would come in between 0.95 billion euros ($1.1 billion) and 1.02 billion euros this year after a 25% jump to 960 million euros in 2019, mainly driven by energy and infrastructure business.

But the world’s biggest cable maker said its projections did not include the impact the global spread of the coronavirus might have on business performance.

Battista said that adjusted EBITDA could come in at the lower end of the guidance range this year.

“It will largely depend on coronavirus developments,” he told analysts, adding that there were no closures at the moment at the group’s plants in virus hot spots China and northern Italy.

The company has not suffered disruption to production or its supply chain, he said.

Last year’s adjusted EBITDA, which was at the lower end of the group’s guidance range between 0.95 billion and 1.02 billion euros, rises to 1.01 billion euros with inclusion of the positive effect of IFRS16 accounting standards.

The group proposed a 2019 dividend of 0.50 euros per share, up from 0.43 euros for 2018. ($1 = 0.8926 euros)

Reporting by Giulio Piovaccari Editing by Valentina Za and David Goodman

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