France's Alstom tops cash expectations on strong orders, cost control
Adds comments in paragraphs 3, 6-7, guidance in paragraph 10
By Alban Kacher and Anna Peverieri
Nov 13 (Reuters) -French train maker Alstom ALSO.PA on Wednesday beat expectations for its half-year cash position, helped by increased volumes and cost saving initiatives.
Alstom, which makes trains and signalling systems for urban and regional rail networks, reported a cash outflow of 138 million euros ($146 million). Analysts had expected a 354 million euro outflow, according to a company-compiled consensus.
Cash generation over the period was driven bybetter-than-anticipated sales performanceand downpaymentsthat came ahead of schedule, said head of investor relations Martin Vaujour in a press call.
In May, the group detailed a plan to cut debt and reform its finances including a $1 billion rights issue supported by main shareholders Caisse de dépôt et placement du Québec (CDPQ) and Bpifrance.
Alstom's cash issues are due in part to inheriting problem contracts after the 2021 acquisition of Bombardier's BBDb.TO rail business.
The train maker expects to increase output to a range of 2,400 to 2,600 train coaches in the second half of the year, from 2,000 units in the first half, Vaujour said.
Overcoming current supply chain issues is one of the priorities set by management, he added, along with expanding the group's industrial footprint, notably in Germany.
The group recorded adjusted operating profit (EBIT) at 515 million euros in the first half of the year, ahead of the 507 million euros expected by analysts on a median basis.
"We are making steady progress on our roadmap, with backlog margins returned to pre-merger levels and a focused shift towards Services and Signalling," group CEO Henri Poupart-Lafarge said in a press release.
The group reiterated its 2024/2025 targets for an EBIT margin of around 6.5%, organic sales growth of 5%, and free cash flow generation within a 300 million euro to 500 million euro range.
($1 = 0.9447 euros)
Reporting by Alban Kacher and Anna Peverieri; Editing by Mark Potter and Richard Chang
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
