Nexans shares are sharply lower Monday as the French cable manufacturing company issued a profit warning amid a weak order backlog and a notable slowdown in high-voltage business activities.
By 1105 BST, Nexans shares had lost 16.79% to trade at €30.32. The stock has been trending broadly lower over the past four weeks.
Nexans reduces previous profit expectations
Earlier Monday, the industrial copper and optical fibre cable manufacturer announced it had to reduce its profit forecast.
“Considering the abrupt deterioration of the high voltage project activities forecast for the second half of 2018, the Group presently anticipates for the full year a stable level of sales and a consolidated EBITDA that could reach €350 million versus €411 million in 2017,” the firm said in a press release.
“In addition, the Group's EBITDA at June 30 is expected to mark a low point in view of the decline in the volume of activity in the high voltage projects area, the negative impact of the application of IFRS 15 norms for the project activities, as previously announced, and the negative impact of raw material inflation,” Nexans said.
“In this context, the Group anticipates a slight contraction of sales for the first half of 2018 and an EBITDA close to €150 million versus €211 million in the first half of 2017,” it added.
Nexans launches share buyback
The French commercial cable manufacturer also announced a share buyback scheme. It said it planned to buy back some 500,000 shares.
“The objectives of this program are first to cancel up to a maximum of 400 000 shares in order to limit the dilutive effect of the capital increase underway for the 2018 International Employee Shareholding plan named Act 2018, and second to use in other share-based employee plans for up to a maximum of 100,000 shares,” Nexans said.
Authorization for this action was granted at the May AGM.