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A morning of rally on the Paris Stock Exchange but, above all, analysts divided on the valuation of the stock of the French railway manufacturer Alstom, between the 8 euros assigned by Barclays to the 24 euros of Citi. All this, between a capital increase of almost one billion euros and a hybrid bond issue of around 750 million to complete the debt reduction plan. This is what the company illustrated, at the same time as the release of the accounts for the 2023-2024 financial year, with losses more than doubled due to extraordinary charges and no dividend, but with some indicators better than expected. The price list, after starting with a decline of 6% and a subsequent rebound up to +10%, at around 11am showed an increase of 3.5% to 16.19 euros, while the Cac 40 index rose by 0.8% . Since the beginning of the year, the share price has gained almost 35 percent.
The operations
Alstom has specified that the capital increase will be subscribed pro rata by the main shareholders, the public bodies Cdpq and BpiFrance, holders of 17.4% and 7.5% of the capital respectively. Furthermore, the hybrid issue will in turn make it possible to strengthen the balance sheet because half of it will have an equity content based on the criteria of the Moody’s agency and the operations will allow the maintenance of the credit rating with an improvement in the outlook from negative to “stable”.
The announced operations are the last element of the 2 billion debt reduction plan that the group has set itself and which consists of the sale of assets for around 700 million, in fact already implemented, after the sale of Tmh for 75 million in January and the deal to sell conventional signaling assets in North America to Knorr-Bremse for $630 million announced in April. Alstom, therefore, believes it has already “defined” its debt reduction plan.
Around 1.2 billion euros from sales and capital markets transactions will be used to repay the debt by next September. «The Baa3 long-term issuer rating – underlines the company – is confirmed and the outlook will be changed to stable after the conclusion of the hybrid bond issue and the capital increase».
The financial results
Meanwhile, the financial results front remains complex, although with some elements better than expected. In the 2023-2024 financial year, which ended on March 31, the company recorded a net loss of 309 million euros against the red 132 million, mainly due to restructuring and integration costs and costs for disputes. Adjusted net profit amounted to 44 million versus 292 million in the previous year. Adjusted EBIT, on the other hand, improved by 17% to 997 million, with a margin of 5.7% from 5.2%, beating analysts’ expectations. Turnover rose by 6.7% on a historical basis and by 9.4% on a purchasable basis to 17.6 billion, exceeding expectations. New orders totaled 18.95 billion versus 20.7 billion in 2022-2023 and brought the total backlog to 92 billion. Net debt as of March 31st amounted to 2.99 billion. The board of directors has decided to propose that the dividend not be paid for the financial year just ended.