(Reuters) -French train maker Alstom on Wednesday forecast a rise in its operating margin for the current financial year, saying the market momentum remained very positive, but delayed its mid-term targets by one year due to high inflation.
Train makers like Alstom stand to benefit from a push towards the decarbonisation of transport, but soaring inflation triggered by the war in Ukraine has driven up input costs and worsened supply chain disruptions for them.
“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,” CEO Henri Poupart-Lafarge said in a statement.
Alstom forecast adjusted operating profit (EBIT) margin of 6% and a significantly positive free cash flow for the twelve months to the end of March 2024.
The company reported an adjusted EBIT margin of 5.2% on adjusted operating profit of 852 million euros ($938 million) for fiscal 2022/23, slightly above the 848 million euros expected by analysts in a company-compiled consensus.
It received new orders worth 20.7 billion euros during the year.
However, the rail infrastructure company said it expected to reach its medium-term adjusted EBIT and free cash flow targets in 2025/26, one year later than previously envisioned, mainly due to the challenging economic environment marked by high inflation.
The manufacturer of high-speed TGV trains said it would propose a dividend of 0.25 euros per share at its next shareholders’ meeting in July.
($1 = 0.9084 euros)
(Reporting by Diana Mandiá and Lina Golovnya in Gdansk; Editing by Milla Nissi)
