Alstom has gone through more critical periods, such as its near-bankruptcy in 2003-2004; he also experienced more prosperous periods. Handicapped by industrial difficulties and weakened by a lack of cash, the world number two in railway construction, behind the Chinese CRRC, announced, Wednesday May 8, a new loss of 309 million euros, after 132 million in 2022. 2023, for its staggered financial year April 2023-March 2024. To avoid a downgrade from the rating agencies and reduce its debt by 3 billion, it also announced a “debt reduction plan” of 2 billion of euros, providing for recapitalization, asset sales, 1,500 administrative and commercial job cuts (out of 79,000) and a freeze of the dividend for the 2023-2024 financial year.
The board of directors, meeting on Tuesday May 7, decided on a hybrid bond issue of 750 million euros and a capital increase of around 1 billion – executed by the end of September – “with maintenance of preferential subscription rights” for current shareholders. The Caisse de dépôt et placement du Québec and Bpifrance will subscribe in proportion to their shares of 17.1% and 7.5%. The sale to the German Knorr-Bremse of signaling in the United States (630 million euros) and that of the 20% held in the Russian TMH (75 million euros) will also bring in cash.
Although its cash flow situation is tight, the group is supported by a context of very strong demand for means of transport on all continents. Turnover reached 17.6 billion euros (9.1 billion euros for rolling stock) and the orders-to-turnover ratio, a key indicator for the sector, stood at 1.1 . In twelve months, Alstom has recorded 18.9 billion euros in orders (trains, metros, trams, signaling, maintenance services, etc.), bringing its backlog to the historic level of 92 billion euros. It posted an operating profit of 997 million euros (+ 17%) and a margin of 5.7%.
“An inventory problem”
But Alstom is unable to bring money into its coffers due to delays in its deliveries, an increase in activity requiring financial resources before payment and “non-performing contracts” discovered in the Bombardier Transportation portfolio. “We had an inventory problem, with too much stock of undelivered trains, and customer payment arrears that were too high”explains its CEO, Henri Poupart-Lafarge, In Le Figaro from May 8.
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