(Reuters) – Alstom on Wednesday reported a smaller-than-expected cash outflow for the first half of its financial year, as it integrates projects the French company took over from the rail unit it bought from Canada’s Bombardier.
Alstom, which makes trains and signalling systems for urban and regional rail networks, finalised its purchase of Bombardier Transportation early this year – a 5.5 billion euro deal that should make the French train maker the second-biggest player in its sector behind China’s CRRC.
But stabilising some legacy projects had caused Alstom to predict “significant” cash outflows for its current financial year.
The company reported a negative free cash flow of 1.46 billion euros ($1.69 billion) for April to September 2021, compared with a negative 1.6-1.9 billion euros it had forecast in July.
A year earlier, it had reported half-year outflows of just 253 million euros.
Chief Executive Henri Poupart-Lafarge said in a statement that the integration of the rail business and stabilisation of its projects was “fully on track.”
“The group had a very strong commercial performance across all regions and product lines, illustrated by significant wins in Mexico, Taiwan, or Europe,” he added.
The company confirmed its forecast that it would begin to generate cash from the second half onwards, as well as confirming its mid-term financial targets over the next four years.
Alstom reported a 14% increase in half-year sales, adjusting for acquisitions and foreign exchange rates, while its adjusted net profit for the period edged up to 172 million euros.
($1 = 0.8655 euros)
(Reporting by Sarah Morland. Editing by Jane Merriman)
