MILAN (Reuters) -Italy's Nexi (BIT:NEXII) forecast a rise in sales and core profit this year after hitting its 2023 goals, but said a low share price and tough market backdrop in the payments industry had prompted it write down its goodwill, yielding a net loss.
To support its share price, Nexi on Thursday said it would invest up to 500 million euros ($545 million) to buy back around 13% of its floating share capital.
Europe's biggest payments company by volumes of transactions processed said it had booked a 1.26 billion euro ($1.4 billion) non-cash impairment, leading to a 2023 net loss of 1 billion euros.
Core profit rose 10% in 2023 and expanded by almost 1.5 percentage points in relation to revenue.
Nexi said it would add another percentage point to the profit margin this year, when it expects core profit to rise at a 'mid-to-high single digit' pace.
Companies in the payments sector have seen their share price dive from the highs reached after the global pandemic turbocharged digital payments. Rising inflation and interest rates hurt their growth prospects by curbing consumer spending.
But higher rates mostly depress valuations because they strongly reduce the net present value of future cash flows.
Nexi said it expects to generate more than 700 million euros in excess cash this year, when sales are forecast to grow by a 'mid-single digit' percentage.
Revenues should gradually strengthen their pace of growth after 2024, it said, pledging to reduce net debt from 2.9 times its core profit this year to 2.5 times at most by 2026.
($1 = 0.9174 euros)