Nexans, the French high-tech cables maker, admitted it is facing “difficult” market conditions in Europe as it unveiled an operating loss of €78m (£66.5m) - after exceptional - items for the first half of 2013.
Nexans blamed the negative earnings picture on a sharp contraction in European demand, as infrastructure spending in Italy, France and Germany failed to impress. A market squeeze was also experienced in the first three months of this year in North America, but business had picked up in the second quarter, the company said, particularly of building cables and LAN cables.
The company’s profits were also affected by a variety of “exceptional” items, it said. An €80m hit came from a depreciation of its assets in Australia, due partly to growing competition from cheaper imports into the region; a further charge of €27m was made against a fall in copper prices; while restructuring of the company, including the creation of a chief operating officer post, had cost €32m.
Nexans is conducting a review of its costs, with a view to making savings. The company says it expects to begin consultations on its plans with employee representatives from mid-October this year.
Frederic Vincent, chairman and CEO, indicated he was encouraged by a “sharp upturn” in business in the second quarter of this year compared with the first quarter, adding: “Our order backlog is still solid and provides with more than two years’ visibility for this activity.”