Alstom FY23 Loss Narrows, Sees Growth Next Year; Delays Mid Term View; Stock Dips

Shares of Alstom SA were losing around 4 percent in the morning trading in France after the rolling stock maker reported Wednesday a loss in its fiscal 2023, however, narrower than last year. Going ahead, the company projects higher margin and sales in fiscal 2024, but delayed mid-term targets by a year.

Henri Poupart-Lafarge, Chairman and Chief Executive Officer, said, “Market momentum remains very positive with an increasing orders pipeline, and compelling growth prospects in all regions supported by a conducive policy environment focused on the greening of transport. Alstom is emerging stronger operationally from this year as we accelerate our transformation….. We remain committed to our mid-term profitability and cash generation targets, which will be reached in 2025/26.”

Looking ahead for fiscal 2024, the company projects adjusted EBIT Margin around 6 percent, and sales growth consistent with mid-term guidance of Compound Annual Growth Rate or CAGR above 5 percent. Free Cash Flow for the year is projected to be significantly positive.

Further, Alstom said it will reach its mid-term adjusted EBIT margin view of 8 percent to 9 percent in fiscal 2026, one year later than previously envisioned, as a result mainly of the new macroeconomic environment in particular the effect of inflation.

Alstom is aiming at sales CAGR over 5 percent between fiscal 2021 and fiscal 2026. This will be supported by strong market momentum and unparalleled 87.4 billion euros backlog as of 31 March 2023, up 8 percent, securing sales of around 38 billion euros to 40 billion euros over the next three years.

Further, the Board of Directors, in its meeting of May 9, decided to propose a dividend distribution of 0.25 euro per share at the next Shareholders’ meeting on July 11.

In fiscal 2023, net loss (Group share) was 132 million euros, narrower than last year’s loss of 581 million euros. For the full year, adjusted net profit was 292 million euros, compared to last year’s loss of 173 million euros.

Adjusted EBIT grew 11 percent from last year to 852 million euros. Adjusted EBIT margin improved to 5.2 percent from 5 percent a year ago.

Sales increased 7 percent to 16.51 billion euros from last year’s 15.47 billion euros. Organically, sales grew 5 percent.

Orders received totaled 20.70 billion euros, up 7 percent on a reported basis, and up 5 percent organically.

In Paris, Alstom shares were trading at 22.80 euros, down 3.6 percent.

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