Prysmian, the world's largest cable maker, expects revenue at its telecoms operations to rise 10 percent this year, compared with a forecast for sales to be flat for the whole group, the head of the business told Reuters on Tuesday. The Milan-based company, which makes cables for telecoms groups to energy companies, reported sales of 7.6 billion euros ($8.5 billion) last year.
"Worldwide, the demand for telecom cables is growing strongly and we expect our sales in this business to rise 10 percent organically," said Philippe Vanhille, Prysmian's senior vice president for telecom operations. In 2016, revenue at the telecom business rose 8.5 percent, excluding the impact of currency swings, to 1.2 billion euros, with a margin on core earnings of 14 percent.
This year, the margin at the telecom business is expected to be about 15 percent, Vanhille said in a phone interview from the Romanian city of Slatina, where Prysmian was inaugurating a renovated optical cable plant. "Our telecom plants are running at full capacity, that's why we are investing in several production sites to keep up with demand from our clients and serve new ones," Vanhille said.
The enlargement of the Slatina factory is the first step in an investment plan of 250 million euros that also includes new plants in the Slovak Republic and in Mexico, the group said in a separate statement. The cable maker is also looking at possible acquisitions but has nothing concrete on the table for now, Vanhille said. Since 2011, when Prysmian became market leader after buying Dutch rival Draka, the group has purchased small or medium-sized companies in high-growth areas. Acquisitions are seen as a way to grow in a sector that is fragmented and Prysmian's chief executive recently said the group was studying several potential M&A targets.
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