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Alstom (PA: ALSO) reported a smaller-than-expected cash outflow for the first half of its fiscal year on Wednesday, as it integrates projects taken over by the French firm from the rail unit it purchased from Canada’s Bombardier (OTC: BDRBF).
Alstom, which manufactures trains and signaling systems for urban and regional rail networks, completed its acquisition of Bombardier Transportation earlier this year in a 5.5-billion-euro deal that will make the French train manufacturer the second-largest player in its sector after China’s CRRC.
However, Alstom forecasted “substantial” cash outflows for the current fiscal year due to the stabilisation of several older projects. For the period April to September 2021, the firm recorded a negative free cash flow of 1.46 billion euros ($1.69 billion), compared to a negative 1.6-1.9 billion euros projected in July.
It had reported half-year outflows of only 253 million euros the previous year. 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 reiterated its projection that it will start generating cash in the second half of this year, as well as its mid-term financial targets for the next four years.
Alstom reported a 14% increase in half-year revenue after adjusting for acquisitions and foreign currency rates, and its adjusted net profit increased to 172 million euros.
Story by : Norvisi Mawunyegah