Trouble returns to WesternLink e Prysmian collapses on the stock market. At 12.36 the share dropped 9,72 per cent to 17,04 euros, achieving the worst performance of the Ftse Mib (-0,27%) together with Juventus (-8,3%), who paid for the tough defeat in the Champions League against Atletico Madrid.
They have arrived to weigh on Prysmian's prices new problems on WesternLink project - cable link between Scotland and Wales – which already in 2018 had made the company tremble, ballast accounts and stock market performance. In a note released yesterday evening, 20 February, with the markets closed, the company communicated that it had detected during an energy transmission regulated by a early user agreements a new problem that caused the temporary interruption of the system. "Prysmian immediately commissioned a team to locate and identify the reasons for the problem - reads the press release - on which it will be possible to determine possible recovery scenarios and potential economic impacts".
As mentioned, it is not the first time that the connection created by the Milanese company together with Siemens creates serious headaches for Prysmian, despite WesternLink being declared ready to operate last October with a maximum initial power of 2250 MW. Already in 2018, the company led by Valerio Battista had been forced to set aside 70 million euros in order to address the malfunctions detected in the submarine and underground sections of the cable, negatively impacting the operational management and the estimates relating to the adjusted ebitda for 2018.
WesternLink's new problems have also pushed Mediobanca to revise its opinion on the company downwards, dropped from “Outperform” to “Neutral”, with a target price lowered from 23,7 to 21,3 euros. While on the one hand the economic effects of the new stop cannot be quantified, the investment bank believes that the new problem could have a negative impact especially in terms of reputation, damaging the group's competitive position in submarine cables.
It should be noted that in the morning Prysmian announced Prysmian had acquired two contracts worth a total of around 50 million euro awarded by Gtd Teleductos, the Chilean telecommunications operator, to build a turnkey submarine cable system without a repeater it will connect Arica to Puerto Montt in Chile. The projects were acquired thanks to NSW, the Group's submarine Telecom division, which became part of Prysmian Group following the acquisition of General Cable. "This order represents an important milestone for Prysmian Group as it marks the first project for a Telecom interconnection in submarine cable obtained following the acquisition of General Cable, thus marking Prysmian Group's return to this sector" said Hakan Ozmen, EVP Project BU of Prysmian Group.
