French industrial cable group Nexans saw its net profit and sales fall in the first half of the year, but raised its financial forecast for 2023, as it continues to focus on the electrification of the world, notably with the order for a new cable ship.
Nexans stays the course despite the obstacles: First-half financial results
For 2023, it has revised its financial targets upwards, aiming for EBITDA of between 610 and 650 million euros (previously between 570 and 630 million euros), says Nexans in a press release. But in the first half of the year, the Group saw its net profit fall to 134 million euros, down 32.6% on the record profit for the same period last year (199 million euros).
Current metal sales fell by 7.6% to 4 billion euros. At constant metal prices, “standard” sales, calculated to neutralize the effect of variations in non-ferrous metal prices, fell by 2.3% to 3.3 billion euros. With regard to Ebitda, Nexans, which had announced in early 2021 a strategic refocusing on its electrification activities, posted a “record level” in the first half, at 354 million euros compared with 308 for the same period last year, representing year-on-year growth of 11.6% on a comparable basis.
The group is reaping the benefits of its reorganization and a “solid order book”, he said. The fall in half-year sales is due in particular to the gradual cessation of umbilical cable business, used mainly in the oil and gas sector, explains the Group. It is also due to a “delay in the ramp-up of the Charleston plant”, the only submarine high-voltage manufacturing plant in the USA, where cables linking wind farms to the mainland are produced.
Nexans on track to significantly reduce its greenhouse gas emissions
The main contributors to half-year sales in the “Power generation and transmission” division are the Crete-Attica and Tyrrhenian Link (Sicily-Sardinia-Italian Peninsula) interconnection projects, as well as the Revolution offshore wind farm projects between Connecticut and Rhode Island in the USA, Moray West in Scotland and South Fork off New York. Nexans had announced on Tuesday evening that it had ordered a third cable-laying vessel to cope with a record backlog of orders for the installation of submarine power cables. Scheduled for delivery in 2026, the vessel will be able to “lay up to four cables simultaneously”.
The Group recently won a €1.7 billion contract to connect future offshore wind farms in the North Sea to the German power grid. In April, Nexans pledged to reduce its greenhouse gas emissions by 46% for scopes 1 and 2, and by 30% for scope 3 (related to customers and suppliers) by 2019. Its objectives are awaiting validation by the Science-Based Targets Initiative (SBTI).
