UPDATE 2-Italy's Prysmian plans to boost investments to hit carbon neutrality targets

(Recasts with carbon emission targets)

MILAN, March 10 (Reuters) - Italian cable maker Prysmian said on Wednesday it plans to lift its capital expenditure by 100 million euros ($119 million) globally over the next decade in an effort to cut its carbon footprint faster and be net carbon-neutral by 2040.

Prysmian, the world’s largest cable maker, said it was setting a target of achieving carbon neutrality across its operations between 2035-2040.

“The decision to set ourselves stricter CO2 emission reduction targets, based on scientific evidence, is aimed at making even more credible and transparent our commitment to pursuing sustainable growth,” Prysmian Chief Executive Valerio Battista said.

The company also targeted carbon neutrality over all its value chain by 2050.

“This is a very difficult target as it’s not totally in our hands, but we’ll do whatever we can,” Battista told analysts in a conference call to discuss the company’s results.

The investments add to a previous pledge to spend around 450 million euros by 2022, over half of the company’s capital expenditure planned for the period, to speed up plans to reach a “net zero” carbon footprint.

As part of this effort, Prysmian started building a biomass heating system at its Pikkala plant in Finland to make it the company’s first net zero emission facility.

Prysmian said its adjusted core profits would grow this year to between 870 million and 940 million euros, after a 17% drop in 2020 to 840 million euros due to the COVID-19 pandemic, but warned uncertainty would persist.

Margins on adjusted core profits also fell last year to 8.4% from 8.7% in 2019.

Milan-listed shares of Prysmian extended losses after the results were published and were down 4.3% by 1545 GMT.

Battista, however, said the company could look ahead “with confidence” and had the “necessary resources” to re-launch its growth.

Prysmian generated a record free cash flow of 487 million euros last year, but projected it would fall to around 300 million euros in 2021. ($1 = 0.8397 euros) (Reporting by Giulio Piovaccari, Editing by Maria Pia Quaglia, Andrea Ricci and Paul Simao)