Alstom, a prominent train manufacturer based in France, is embarking on a strategic initiative to raise €1 billion, aiming to alleviate its debt burden and fortify its financial standing. This endeavor, which includes the issuance of shares and bonds alongside €700 million from planned sales, is pivotal for the company’s Litchurch Lane plant owner in Derby to uphold its credit rating.
Reinforcing Financial Foundations
Henri Poupart-Lafarge, the CEO of Alstom, underscores the significance of this move, stating that it will provide a robust platform for sustainable profit generation and enhanced cash flow. The objective is not merely to address the existing debt but to establish a resilient financial structure that supports the company’s long-term viability.
Navigating Challenges with Operational Strategies
Despite challenges such as a decline in orders from €12.8 billion to €11.3 billion in Europe during the fiscal year 2023/24, Alstom remains steadfast in its commitment to operational excellence. By implementing new strategies, the company seeks to mitigate potential job losses and bolster job security for its workforce, which spans approximately 80,000 employees worldwide.
Expanding Contract Portfolio in Europe
In Europe, Alstom continues to secure significant contracts and extensions, demonstrating its enduring presence and competitiveness in the market. Notable agreements include contracts valued at around €950 million in the UK, over €800 million in France, and participation in the development of a metro line in Romania. These endeavors underscore the company’s commitment to driving growth and innovation within the region.
Sustainable Profit Growth
Despite facing stiff competition, particularly from China’s CRRC, Alstom remains resilient, reporting a profit of €997 million for the fiscal year ending in March—a notable 17% increase. However, with a net debt of approximately €3 billion, the company recognizes the imperative of proactive measures to strengthen its financial position and sustain its growth trajectory in the dynamic global market.
SOURCE: Ref Image from Reuters
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