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Train maker Alstom earmarks new provisions for earlier Bombardier deal

Train maker Alstom earmarks new provisions for earlier Bombardier deal
Train maker Alstom earmarks new provisions for earlier Bombardier deal   -   Copyright  (c) Copyright Thomson Reuters 2021. Click For Restrictions -
By Reuters

PARIS (Reuters) – French train maker Alstom earmarked a further 632 million euros ($768 million) of provisions for risks on its earlier purchase of Bombardier’s rail unit, while adding its integration of the Bombardier business was on track.

Alstom also said sales for its fiscal year ending on March 31 rose to 8.79 billion euros from 8.2 billion a year earlier, while its adjusted earnings before interest and tax (EBIT) rose to 645 million euros from 630 million.

“Sales resisted well despite the impact of the first Covid-19 wave on our operations, and the group delivered a solid operational performance with tangible results in terms of profitability,” said Alstom Chairman and CEO Henri Poupart-Lafarge.

“With the integration of Bombardier Transportation fully on track, the group is starting the new fiscal year fully focused on customer satisfaction, project execution and on seizing opportunities from the strong commercial momentum supported by a worldwide push for sustainable mobility,” he added.

In January, Alstom announced it had completed the Bombardier rail business deal, marking an acquisition that should make Alstom the world’s second-biggest player in its sector behind China’s CRRC.

Alstom said it was sticking to its plans to generate 400 million euros of cost synergies on an annual run rate basis by the fourth to fifth year, following the deal’s completion, and to restore Bombardier Transportation’s margin to a standard level in the medium term.

Alstom also announced a dividend of 0.25 euros.

The French company reiterated that the Bombardier transaction is expected to be double digit EPS accretive to its earnings per share from the second year following the closing of the deal, and is expected to preserve Alstom’s strong credit profile with a ‘Baa2’ rating.

Alstom, in which French conglomerate Bouygues has a 3.1% share capital stake, launched a 2 billion-euro capital increase to finance the Bombardier deal in December after it had secured European Union antitrust approval six months earlier.

(Reporting by Blandine Henault; Editing by Sudip Kar-Gupta)