Nexans, the world's biggest cable maker, expects its sales to rise and operating margin improve this year, the company said on Monday, as it sees a pick-up in trading and manages to pass on higher metal prices.
The company is set to be overtaken as the world's biggest cable manufacturer after it lost out to Italian rival Prysmian
The overall improvement in the market environment in the second half (of 2010) has enabled Nexans to announce results slightly above expectations for sales and operating margin, Chairman Frederic Vincent said in a statement.
The group expects raw material prices to remain firm in the first half of 2011 but said it was able to pass on copper and aluminum costs in contracts although it was more difficult to pass on costs in oil-based materials.
Sales last year rose 22.5 percent to 6.18 billion euros ($8.37 million), with organic growth at 0.4 percent.
At constant non-ferrous metal prices sales were up 7 percent at 4.31 billion euros.
The operating margin was 4.8 percent, ahead of the company's target of around 4.5 percent but down from 6 percent in 2009. Net income amounted to 82 million euros.
Nexans said it expects 2011 sales to rise more than 5 percent and the operating margin to reach 5.5 percent, in a context characterized by a marked upturn in activity in the fourth quarter and a strong increase in raw material prices.
Nexans was continuing to look at acquisitions, notably overseas, Chief Financial Officer Frederic Michelland said.
The stock was up 5.6 percent at 69.14 euros by 0939 GMT.
The 2010 results confirm a net improvement in fourth-quarter trading as well as efforts to reduce stocks, CM-CIC said in a note.
The dividend was increased by 10 percent to 1.10 euros a share, after halving the payout a year ago after a slump in industrial demand hit its 2009 profits. ($1=.7381 euros) (Reporting by Astrid Wendlandt and Gus Trompiz; Editing by Greg Mahlich)