HITACHI, LTD. MILAN (Reuters) - Finmeccanica (>> Finmeccanica SpA) lifted its 2014 targets for orders, sales and profits on Tuesday and approved a new multi-year business plan as the Italian industrial conglomerate seeks to transform itself into a leaner aerospace and defence group.
Finmeccanica said in a statement its board had also asked Chief Executive Mauro Moretti to continue talks to sell its rail assets, indicating that no final decision on the sale had been reached.
Moretti, appointed last year to revive the indebted group, has shortlisted Japan's Hitachi (>> Hitachi, Ltd.) and China's Insigma as buyers of its unprofitable train-making unit AnsaldoBreda and its 40 percent stake in rail signalling company Ansaldo STS (>> Ansaldo STS SpA).
A trade union official said Finmeccanica is thought to be favouring Japan's Hitachi (>> Hitachi, Ltd.).
The sale of the two units could allow Finmeccanica to focus on more profitable businesses and cut net debt following a downgrade to junk status in 2013.
Finmeccanica expects 2014 core profit, or earnings before interest, tax and amortisation, of 1.04-1.06 billion euros ($1.18-1.20 billion), up from its previous guidance of 980 million-1.03 billion euros. For 2015 it expects 1.15-1.20 billion euros.
It also lifted 2014 guidance for sales, orders and cash flow, citing results achieved in the first nine months of last year and updated estimates for the last quarter.
The Rome-based group said the new targets for the coming years still include the rail units that have been put up for sale, but reflect the exit from two business segments of its U.S. defence affiliate DRS Technologies and the transfer to Boeing (>> Boeing Co) of part of its B787 aircraft contract. This would wipe off around 500 million euros in annual sales from 2015.
Finmeccanica said, excluding asset sales, it wanted to cut net debt to below 3.5 billion euros by 2017.
(Reporting by Danilo Masoni; editing by Agnieszka Flak and Susan Thomas)
By Danilo Masoni
