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Alstom: Soaring Inflation to "Weigh" on Annual Earnings

Published 07/19/2022, 05:06 PM
© Reuters.

By Scott Kanowsky -- Paris-listed shares in Alstom (EPA:ALSO) slumped to near the bottom of the pan-European STOXX 600 on Tuesday after the French train maker warned that red-hot inflation will slightly weigh on its annual profits.

The company also flagged that strict COVID lockdowns in China may lead to shortages in the supply of key electronic parts. These delays could, in turn, place added "tension" on deliveries of products and services this year.

"The current economic and political context, becoming more complex, creates uncertainties in business activities, and Alstom is no exception," it said in a statement. "The Group has therefore put in place strong risk mitigation and cost-out actions to navigate these uncertainties."

However, Alstom still reiterated its full-year and medium-term financial outlook. It added that neither continued growth in consumer prices nor further supply chain disruptions will "materially impact" deliveries in its 2022-2023 fiscal year.

Meanwhile, first quarter sales jumped by 8% compared to the same period last year, coming in at a little more than €4B. Strong demand in Europe - which accounted for 70% of the group's total quarterly orders - helped offset a "very limited impact" from supply delays.

Shares in Alstom have declined by more than 30% since last year.

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