A difficult Friday in Piazza Affari for Leonardo following the publication of the accounts for the first half of 2022, which closed with a net result up 50.8% to 267 million euros (€ mil. 177 in the first half of 2021). Revenues rose to € 6.576 billion, showing a positive trend (+ 3.6%) compared to the first half of 2021 (€ 6.3 billion), mainly thanks to the performance of helicopters.
Orders were up 9.4% to € 7.3 billion. The EBITA is equal to 418 million (+ 11.8%).
“The solid results of the first half allow us to confirm the guidance for 2022, thanks to the improvement of all indicators, including EBITA and cash, and to the further consolidation of the growth of orders in all businesses, in the domestic markets. and international, the effect of which will continue throughout 2022. ” This is the CEO’s comment Alessandro Profumo on the occasion of the results for the first half of the year. “The positive opinion on Leonardo is also reflected by the revision to a positive outlook by S&P and Moody’s “, he continued.
In Piazza Affari, the Leonardo stock collapsed by 8% after being suspended for excess of a decrease (minimum at -11.4% to 8.76 euros). Since the beginning of the year, Leonardo has been among the few stocks with a positive balance sheet (approximately + 44%), competing with Tenaris for the palm of the best YTD performers.
Despite the positive accounts, the stock collapses on the stock market, that’s why
“Leonardo published results for the first half of the year in line with expectations, but the failure to update the guidance put a brake on investor optimism”, writes the Citi analyst Charles J Armitage in a note.
The Italian aerospace and defense firm has historically struggled to produce cash, so the better-than-expected first-half cash result is a step in the right direction, confirms Citi. Leonardo’s top line and operations were in line with consensus views.
Leonardo will gain an advantage from currency effects due to the strength of the dollar, so there may be some disappointment about the lack of an update to the guidance, according to Citi. However, Leonardo’s US-based DRS business only accounts for about 17% of sales, so the boost will be less than some competitors, says Citi.
Perfume, I do not expect any changes in defense from the next government
“It is difficult to say what will happen” after the elections on 25 September, “I presume that there will be either a center-right government or a government with a similar base to that of the Draghi government. In both cases, I don’t expect changes in the defense budget ”. Leonardo’s CEO said so, Alessandro Profumoanswering an analyst’s question during the presentation of the results for the first half.
“Usually the center-right has a positive view of defense spending, and the current coalition has made a commitment to increase it to 2% of GDP, so I don’t expect any major changes in terms of defense budgets,” he explained. .
Profumo will wait for the vote on September 25 before proceeding with the transaction for OTO Melara
CEO Alessandro Profumo will wait for a new Italian government to take office before proceeding with any potential transactions for OTO Melara, his gun manufacturing unit, according to Reuters. Profumo added that an agreement involving unity it will not constitute a sale but a combination to establish a new actor. Due to the strategic nature of the subsidiary, any agreement relating to OTO Melara will require government approval. Recall that the Italians will go to the polls on 25 September.