Alstom's 3rd-quarter sales in France top the forecasts for services growth
Alstom, a French train manufacturer, reported Tuesday that its third-quarter sales were higher than expected. This was due to double-digit growth in revenue for the divisions of systems and services.
Alstom, a manufacturer of trains and signalling for urban and regional railway networks, has reported sales of 4,67 billion euros (4,86 billion dollars) in the third quarter ended Dec. 31. Visible Alpha consensus said that analysts had expected an average of 4.49 billion euro.
The sales growth was boosted by the group's systems division which grew 26% organically, and the services contribution, which grew 11% on a year-on-year basis.
Alstom is focusing more on services, which offer better yields and are predictable. A company representative said this ahead of the earnings announcement.
Alstom is trying to improve its finances and reduce debt, in part due to the problem contracts that it inherited following the 2021 purchase of Bombardier’s rail business.
In a Tuesday statement, Henri Poupart Lafarge, CEO of the group said: "We are implementing cost-efficiency measures in accordance with our plans and we're nearing completion of our integration effort. This allows us to confirm our fiscal targets for FY2024/25."
Alstom will return profits to its shareholders after it has eliminated its net financial debt. The company representative confirmed that the company had adopted a policy of no dividends to help reduce its debt. This debt stood at 927 millions euros by end-September, last year.
A representative of the company, speaking on condition of anonymity said that the group expected to surpass 4 billion euros this year in revenues from services, as opposed to the 1.5 billion by 2020.
Four of the five major contracts signed in the third quarter were for services. This includes a 500-million euro contract with an unnamed European partner, announced at the end of December. Reporting by Anna Peverieri, Alban Kacher and Tomaszjanowski.
(source: Reuters)
