ROME (Reuters) -Italy's state-controlled defence and aerospace group Leonardo is aiming to join the German next-generation Leopard 2 tank programme, CEO Roberto Cingolani said on Thursday.
The Leopard is jointly manufactured by German companies Krauss-Maffei Wegmann and Rheinmetall.
"I confirm that we are working in this direction, actually the expectation is extremely good, the negotiation is doing very well, please allow me not to give more details at the moment," Cingolani said in a post-results call with analysts.
The Italian government said in July it was planning to buy the German tanks, with a defence source telling Reuters the number would be around 125.
Cingolani also said Leonardo wants to renegotiate a fuselage supply deal for the Boeing (NYSE:BA) 787 aircraft, with a view to securing higher prices reflecting inflation.
He said positive developments on this front may come "in the next 6-8 weeks or so".
The company on Thursday posted rising core earnings, revenues and new orders and confirmed its full-year guidance. Profitability in the nine months to Sept. 30 was mainly supported by European electronics, aircraft and helicopters.
Earnings before interest, taxes, and amortization (EBITA) stood at 214 million euros ($229.15 million) in the third quarter, matching a company-provided consensus estimate and up from 201 million euros in July-Sept. 2022.
Over the same period, revenues rose to 3.375 billion euros from 3.341 billion, while new orders stood at 4.584 billion euros against 4.4 billion a year earlier and order backlogs rose to a record 40 billion euros.
Net debt was just over 3.8 billion euros as of Sept. 30, while free operating cash flow (FOCF) improved "significantly" in the nine months at -604 million euros, compared to -894 million euros in Jan-Sept. 2022.
Leonardo's guidance for 2023 includes a forecast for new orders of around 17 billion euros, revenues in the 15-15.6-billion-euro range, EBITA at 1.26-1.31 billion euros and group net debt of about 2.6 billion euros.
The company confirmed it would unveil a new industrial plan in March 2024, which Cingolani previously said would focus heavily on cybersecurity and space as the two main pillars of innovation.
Cingolani told analysts in a slide presentation on Thursday he was working on "a leaner and stronger organisation", announcing, among other things, "moderate" plans to sell assets and 400 job cuts at company headquarters through early retirement.
Like other defence groups, Leonardo has benefited from rising military spending in the wake of Russia's invasion of Ukraine, and it is involved in the GCAP next-generation fighter jet programme undertaken by Italy, Britain and Japan.
The Italian government and Leonardo have been clamouring to have an equal partner role in the programme, and Cingolani said he is closely discussing the issue with Japan's Mitsubishi Heavy Industries and Britain's BAE Systems (LON:BAES) .
Leonardo's Milan-listed shares have risen by almost 77% since January, and have almost doubled in value year-on-year. On Thursday, they closed up 0.18% at 14.205 euros.
($1 = 0.9339 euros)