Summary
- Adj industrial EBIT almost tripled to 266 mln euros in Q2
- Margin on adj industrial EBIT at 6.5% in Q2, up 380 bps
- Industrial revenues rose 23.4% in Q2 to 4.108 bln euros
- Order backlog “strong”, CEO says
MILAN, Aug 2 (Reuters) – Strong pricing power supported a spike in Iveco’s (IVG.MI) operating profits in the second quarter, allowing the Italian truck and bus maker to raise its 2023 guidance for a second time and sending its Milan-listed shares up more than 10%.
The manufacturer on Wednesday said its adjusted earnings before interest and tax (EBIT) from industrial activities would come in at between 650-700 million euros ($715-$770 million) this year, up from an already improved previous forecast of between 510-550 million euros.
The guidance upgrade came on the back of “current industry outlook, solid price realisation, strong order backlogs and no signs of unusual levels of order cancellations,” the company said.
Shares were up 10.3% by 1010 GMT, in marked contrast to a 1.2% drop for Italy’s blue-chip index (.FTMIB). They have gained more than 70% this year after going into reverse in 2022 following a spin-off from CNH Industrial (CNHI.MI).
Iveco also guided for an increase of net revenues from industrial activities of between 5%-8% on the year, up from a previous forecast of 3%-5%.
CEO Gerrit Marx told analysts in a post-earnings call that Iveco’s heavy-duty truck business further improved its profitability, “continuing its path to mid-single digit EBIT margins mid-term”, while light-duty truck segment ended the second quarter with double-digit EBIT margins.
“Supply chain is much better now than in the first half, but there are still a few issues popping up in a fairly unpredicted way. And we are right now very well trained to deal with those,” Marx said, adding the company’s order backlog was strong.
In the second quarter, Iveco’s adjusted EBIT from industrial activities almost tripled to 266 million euros ($292 million), topping analysts’ expectations of 156 million euros in a company-provided consensus.
“Strong” pricing power more than offset higher raw material and energy costs, it said. ($1 = 0.9107 euros)
