© Reuters. FILE PHOTO: The logo of Iveco Group is seen outside the Milan Bourse (Italian stock exchange) on the day truckmaker Iveco Group starts trading there, in Milan, Italy, January 3, 2022. REUTERS/Daniele Mascolo/File Photo
MILAN (Reuters) – Italian truck and bus maker Iveco Group on Wednesday raised its 2023 guidance for the third time this year, after it posted a rise in third-quarter operating profit thanks to a strong pricing power.
The manufacturer said its adjusted earnings before interest and tax (EBIT) from industrial activities would come in between 770-800 million euros ($814-845 million) this year, up from an already improved previous forecast of 650-700 million euros.
In the third quarter, Iveco’s adjusted EBIT from industrial activities almost tripled to 180 million euros, slightly topping a company-provided analysts’ consensus of 164 million euros.
Free cash flow generation from industrial activities, however, was negative for 375 million euros in the July-September period as the group slowed down the pace of deliveries of new vehicles to its dealers’ network due to longer, capacity-related, lead-times at several bodybuilders in Europe.
“This led to a somewhat high level of finished inventory – and cash absorption at group level – which we will deplete over the course of fourth quarter 2023 and first quarter 2024,” Chief Executive Officer Gerrit Marx said in a statement.
($1 = 0.9463 euros)