Home / Business and Economy / Alstom's Debt Woes: Hybrid Bonds Surge as Outlook Dives
Alstom's Debt Woes: Hybrid Bonds Surge as Outlook Dives
2 Nov
Summary
- Alstom's shares dropped 25% after a second outlook cut this year.
- The company's adjusted core profit margin was negative 4% in H1.
- Alstom aims to cut debt by €2 billion amid cash flow concerns.
French train manufacturer Alstom saw its shares tumble 26% after announcing a second downward revision to its full-year financial outlook. This warning, attributed to operational setbacks with its Coradia Max regional train program in Germany, has sent ripples through the market.
In the first half of the financial year, Alstom reported a stark -4% adjusted core profit margin, a sharp contrast to the 6.4% achieved last year. The company has now revised its full-year outlook to a low single-digit organic sales growth and a significant free cash flow outflow of €1.5 billion, a substantial shift from previous positive guidance.
Adding to its woes, Alstom intends to reduce its debt by around €2 billion. This follows a similar profit warning less than seven months prior, which also cited delays and execution problems on major rolling-stock contracts. The company has also lowered its annual production target to approximately 4,000 rail cars.
