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Train maker Alstom earmarks new provisions for earlier Bombardier deal

05/11/2021 01:35
Train maker Alstom earmarks new provisions for earlier Bombardier deal

- French train maker Alstom ALSO.PA earmarked a further 632 million euros ($768 million) of provisions for risks on its earlier purchase of Bombardier's BBDb.TO rail unit, while adding its integration of the Bombardier business was on track.

Alstom also said sales for its fiscal year ending on March 31 rose to 8.79 billion euros from 8.2 billion a year earlier, while its adjusted earnings before interest and tax (EBIT) rose to 645 million euros from 630 million.

"Sales resisted well despite the impact of the first Covid-19 wave on our operations, and the group delivered a solid operational performance with tangible results in terms of profitability," said Alstom Chairman and CEO Henri Poupart-Lafarge.

In January, Alstom announced it had completed the Bombardier rail business deal, marking an acquisition that should make Alstom the world's second-biggest player in its sector behind China's CRRC 601766.SS. nL1N2K411Z

Alstom said it was sticking to its plans to generate 400 million euros of cost synergies on an annual run rate basis by the fourth to fifth year, following the deal's completion, and to restore Bombardier Transportation’s margin to a standard level in the medium term.

The French company reiterated that the Bombardier transaction is expected to be double digit EPS accretive to its earnings per share from the second year following the closing of the deal, and is expected to preserve Alstom’s strong credit profile with a 'Baa2' rating.

Alstom, owned 9.7% by French conglomerate Bouygues BOUY.PA, launched a 2 billion-euro capital increase to finance the Bombardier deal in December after it had secured European Union antitrust approval six months earlier.

($1 = 0.8235 euros)

(Reporting by Blandine Henault;
Editing by Sudip Kar-Gupta)

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