Prysmian to invest 25 mln eur in US capacity, no scope for acquisitions

Prysmian to invest 25 mln eur in US capacity, no scope for acquisitions

	Published : Tue, 11 Sep 2007 17:11 By : Agencies Print this Story

MILAN (Thomson Financial) - Prysmian SpA plans to invest 25 mln eur in expanding its high voltage 300 kilovolt cable capacity in the US, said CEO Valerio Battista, citing the lack of acquisition targets in the US.

More generally on mergers and acquisitions in the cable sector, Battista said he sees these continuing to involve small and medium-sized players, rather than between major players.

'Market consolidation is going on with medium or small-sized companies for the time being,' he said, noting how Prysmian has done such deals recently in New Zealand and in India.

These two markets are 'fast-growing with good margins and these acquisitions can be profitable in the next years', he said.

'They are medium-size without any huge cash out and with good growth in the future,' he said during a conference call with analysts.

On the impact of sub-prime credit problems, Battista said Prysmian has limited exposure in the US market and has seen minimal impact in July and August.

'In the last two months of the financial crisis, there are no significant effects that we fear today, for the simple reason our exposure in the US is very limited,' he said.

Prysmian will also have to add capacity if it wins a major Malaysia order, though officials said it is not clear where the capacity would be added.

Battista said raw material prices for metals and oil-based inputs such as plastics remain stable.

Another Prysmian official said the company had a 39 mln eur gain on metal derivatives in the first half, with this likely to reverse in the second half, with no impact in the full year results.

On tax charges, he said the first half tax rate was unusually low at 25.2 pct, because of absence of tax on certain income and brought-forward tax losses in a number of countries where results improve.

These tax losses are unlikely to be exhausted for five to six years in Italy, where the losses amount to 200 mln eur, and in France, where these amount to around 50 mln, he said.

nigel.tutt@thomson.com

nt/ajb

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