September 18, 2018 / 3:56 PM / 8 months ago

UPDATE 1-Prysmian confirms 2018 profit goal, boosting shares

(Adds context, share price)

By Francesca Landini

MILAN, Sept 18 (Reuters) - Prysmian, the world’s biggest cable maker, said on Tuesday it would meet its 2018 core profit target despite problems with its Western Link project in Britain, sending the Italian company’s shares more than 5 percent higher.

The Milan-based group had cut its target for adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in June due to additional costs for the 800 million euro ($935 million) Western Link project to build a high-voltage cable connection from Scotland to England.

Though the issues with Western Link have not yet been solved, the group said it was confident its full-year adjusted EBITDA would reach its target of 860 million to 920 million euros, including the impact of the acquisition of U.S. rival General Cable.

Prysmian said provisions worth 70 million euros booked for Western Link in the first half were the main reason behind a fall in adjusted EBITDA in the period.

It added, however, it deemed further provisions unnecessary to cover for the costs related to the repair works and the delays in the delivery of the project.

In June the group said it had detected a technical problem at the Western Link cable and last week it suspended work on the project to look into an issue with the onshore section of the cable.

In the January-June period, adjusted EBITDA came in at 339 million euros, including 25 million euros attributable to General Cable, down from 364 million euros last year before the merger.

Prysmian confirmed expected synergies of 150 million euros from the General Cable deal with benefits showing already in the 2018 results. ($1 = 0.8558 euros) (Editing by Adrian Croft)

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