Alstom also reported an adjusted Ebit of €263m for the first half of 2020-21, falling 18% from €319m for the same period last year. Alstom’s Ebit margin remains robust, falling only 0.2% to 7.5% for the period compared with 2019-20.
Despite new orders declining by 43% year-on-year to €2.65bn for the period, and sales by 15% to €3.15bn, Alstom retains an order backlog worth €40bn, with a year-on-year decline of only 3%.
Alstom says the primary cause for the poor financial results was the impact of the coronavirus pandemic.
“During the first half of the year, the group’s commercial activity was impacted as anticipated by the shift in tender activity towards the second half of 2020-21 in the context of the pandemic,” says Mr Henri Poupart-Lafarge, Alstom chairman and CEO. “Yet we managed to secure some large orders, notably in Central and East Asia.”
The company says the downturn reversed significantly in the second quarter, with production returning to normal levels, and the completion of work on the Dubai Metro’s Red Line extension in July, and Guadalajara Metro Line 3 in September.
“We also achieved major milestones in the Bombardier Transportation acquisition process in recent months and we are looking forward to closing the transaction in the first quarter of 2021,” Poupart-Lafarge says. “We are confident that the various stimulus plans together with the increasing demand for sustainable mobility solutions will lead to a solid market recovery, which is reflected in our strong tender pipeline for the second semester.”
Alstom completed the acquisition of brake manufacturer IBRE on June 30, which the company says will reinforce ability to manufacture braking systems. IBRE reported a turnover of approximately €10m in 2019.
Alstom is anticipating stronger performance in the second half of 2020-21, providing that the current second wave of the Covid-19 pandemic has no material effect on production or the commercial tendering schedule. The company forecasts sales for the second half of between €7.6bn and €7.9bn, and an adjusted Ebit margin within the 7.7% - 8% range.
