Nexans has reported sales in the first half of 2010 of €2.955 billion, compared to €2.514 billion in H1 2009.
At constant non-ferrous metal prices, a measure used by Nexans, sales amount to €2.1 billion, compared to €2.085 billion in 2009. However, at constant consolidated (like-for-like) and exchange rates, organic sales dipped by 5.3% (6.3% for cable businesses)year-on-year.
Nexans cited a particularly difficult first quarter marked by an organic decline in of 11.1% year-on-year, before the second quarter saw a sharp 12% year-on-year upturn in sales across all businesses.
Operating margins have also improved, after weaker demand, and adverse weather in Europe in Q1 2010. There were also some problems with certain high-voltage submarine cable contracts, which were sorted by Q2 2010. However, there has still been continued pressure on building wire margins, and continued pressure from higher and rising copper prices. As a result, the company reported a net loss in H1 2010 of €17 million, compared to a loss of €57 million in H1 2009.
Commenting on the first half-year results for 2010, Frédéric Vincent, Chairman and CEO, said, “After a difficult first quarter that undermined the half-year’s profit, sales volumes have risen in the past three months, especially in those industrial sectors qualified as early cycle, such as automotive and local area networks. Positioned on strong segments, such as, renewable energies, Transmission and Distribution networks (T&D), as reflected in our participation in the Transgreen industrial initiative-, transport and energy resources, Nexans has access to considerable growth prospects.
With a solid financial structure, further strengthened by our ongoing actions to cut costs and rationalize our industrial facilities, the Group has the necessary resources to continue to implement its strategy of a firm commitment to development in emerging areas. This is demonstrated by commercial and industrial projects in Russia, China, India and the Middle East, where we will shortly inaugurate our first production site in Qatar. Lastly, with a view to optimizing our organizational structure, transversal programs targeting manufacturing excellence, commercial efficiency and employee training are gradually being rolled out to all Group units. Based on these factors, and looking beyond the 2010 transition year, Nexans remains confident about its economic model.”
