Alstom operating profit flat as delivery problems offset orders
By Dimitri Rhodes and Matthieu Huchet
Alstom Reports Stable Full-Year Adjusted Operating Profit
May 13 (Reuters) - Alstom on Wednesday reported stable full-year adjusted operating profit as weak delivery on some large train contracts offset a strong order intake, underscoring the execution issues behind its recent cash warnings.
Financial Results Overview
Adjusted earnings before interest and taxes were 1.17 billion euros ($1.37 billion), giving a margin of 6.1%, versus 1.18 billion euros and the same margin a year earlier, the French train maker said.
CEO Statement on Execution Quality
"Our priority is to improve execution quality, including tighter day-to-day project management, reinforced planning discipline and improved coordination across engineering, supply chain and manufacturing," new CEO Martin Sion said in a statement.
Impact of Project Problems on Forecasts
The result follows Alstom's April decision to drop its three-year cash flow forecast after project problems hurt near-term margins and cash generation. The company also cut its operating margin target for the 2026/27 year to 6.5% from a previous 8% to 10%.
Balance Sheet and Market Concerns
Rules Out Equity Raise
Alstom also sought to calm market concerns over its balance sheet.
Chief Financial Officer Bernard Delpit told reporters that Alstom had fully ruled out a capital increase, a step some traders had feared after the latest profit warning sent the shares down 30%.
Credit Metrics and Agency Expectations
"Our figures, which we'll call credit metrics, the very metrics that Moody's rating agency looks at, are completely in line for 2026 and with our forecasts and announcements for 2027, and with the agency's expectations," he said.
Alstom has issued two major cash warnings since late 2023, raising investor concern over contract execution, debt and liquidity.
($1 = 0.8522 euros)
(Reporting by Dimitri Rhodes and Matthieu Huchet in Gdansk; Editing by Matt Scuffham)
