Finmeccanica met Libya rebels on contracts

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Italian aerospace and defence group Finmeccanica SpA has met with the Libyan interim government in Benghazi to discuss contracts it has there and does not expect the conflict to impact its guidance.

State-controlled Finmeccanica, which makes helicopters and electronic warfare systems and assembles military and civilian jet aircraft, is 2 percent owned by Libyan Investment Authority.
“We have met with the interim government in Benghazi and they told us all STS contracts will be confirmed,” Finmeccanica CFO Alessandro Pansa said on a conference call with analysts, Reuters reports.

Separately on Thursday, Finmeccanica transport signalling unit Ansaldo STS said it was unable to assess the impact of conflict in Libya, adding it had expected the North African country to account for a significant part of its 2011 business.
“The interruptions in Libya will not affect full guidance (for the Finmeccanica group),” Pansa said.

Finmeccanica reported on Thursday a 92 percent fall in its first-quarter net profits mainly due to higher financial charges, sending shares lower.

The company’s net profit dwindled to just 7 million euros (US$10.39 million), a far cry from the 108.4 million euros average forecast from four analysts polled by Thomson Reuters I/B/E/S.

GUIDANCE CONFIRMED

The group confirmed its outlook for the full year, with revenues expected between 18.3 billion and 19 billion euros and adjusted earnings before interest, tax and amortisation (EBITA) of 1.53-1.6 billion euros.
“We don’t expect to suffer much from the defence cuts in the U.S.,” Pansa said, adding Italian defence spending this year would be 5.8 billion euros, similar to that in 2010.
“I don’t see any significant reduction (in Italian defence spending) in the next few years,” he said.

Revenues fell 5 percent in the first quarter to 3.86 billion euros.

Debt was 4.05 billion euros at the end of March, down from 4.38 billion euros a year earlier. Pansa said he expected debt to be in the region of 2.8 billion euros by year end.

Finmeccanica sold a 45 percent stake in its Ansaldo Energia power unit to US fund First Reserve Corp in March for up to 642 million euros in a move to cut debt.



Finmeccanica shares closed down 2.13 percent at 9.17 euros, while the STOXX Europe 600 Industrial Goods and Services Index .SXNP was up 0.73 percent.