Finmeccanica plays down hit from Libyan turmoil


Italy’s top defence and aerospace company, Finmeccanica SpA , played down the impact on its books from turmoil in Libya as minimal, as it reported a 22 percent fall in 2010 profit due to restructuring and debt costs.

Chief Executive Officer Pier Francesco Guarguaglini said the company’s order backlog in Libya stood at around 700 million euros, a tiny amount compared with its order book worth 48.7 billion euros last year.

The company reported 2010 sales of 18.7 billion euros (US$25.96 billion) and forecast revenue would be 18.3 billion to 19 billion euros this year, Reuters reports.

It expects adjusted earnings before interest and tax (EBITA) of 1.53 billion to 1.6 billion euros in 2011, and said the group’s free operating cash flow is expected to be positive by between 400 million and 500 million euros.

Finmeccanica’s 2010 net profit was 557 million euros, down from 718 million euros in 2009 and below analysts’ average forecast of 635.4 million euros, according to Thomson Reuters I/B/E/S.

In addition to restructuring and debt costs, the company was also hurt by defence spending cuts in the face of a weak global economy.

Analysts have fretted about the impact on the company from turmoil in Libya, which holds a 2 percent stake in Finmeccanica and was expected to generate billions of euros from contracts in the coming years.

Chief Financial Officer Alessandro Pansa said Libya accounted for just 250 million to 300 million euros of forecast revenue this year, based on the assumption that the current turmoil there will continue.

The company, which raised its 2010 cash flow and orders forecasts earlier this year, said it aimed to cut debt to below 2.5 billion euros by the end of 2011.

Finmeccanica, which makes helicopters and electronic warfare systems and assembles military and civil jets, said it would keep its dividend payout at 0.41 euros per share.

Finmeccanica has been in the spotlight in recent months after a company in which it has a stake was embroiled in a money-laundering probe. The company has denied creating slush funds abroad.