Trouble with German regional trains sends Alstom shares down by more than 30 percent

Shares in French train maker Alstom fell by more than 30 percent on the Paris stock exchange on Monday morning. At around 9.25 am the stock was down 31 percent at 10.90 euros, La Libre reports, citing AFP. Since January its market value has already fallen by more than 55 percent. The trigger is the year's second profit warning, linked to production problems with the Coradia Max, an electric regional train for Germany.

For its 2026-2027 financial year, which ends in March, Alstom now targets an adjusted operating margin of about 1 percent, compared with around 6.5 percent previously. In the first half that margin was negative, at around minus 4 percent according to preliminary figures, the French business site Economie Matin writes. Revenue nevertheless rose 3 percent to 9.3 billion euros and orders reached 11 billion euros. The problem therefore lies mainly in executing the contracts.

With the Coradia Max, Alstom is struggling with industrialisation problems and longer approval procedures. Production was temporarily halted in the first quarter to fix defects. The company now expects to build around 4,000 rail cars this financial year, compared with 4,400 to 4,500 previously. Other projects for or from Germany have also faced higher costs and delays.

Cash flow is turning negative: Alstom now expects negative free cash flow of around 1.5 billion euros, where it previously expected a positive balance. The company wants to cut around 2 billion euros of debt by September 2027 in order to keep its investment-grade status with rating agencies. According to broker Oddo BHF, quoted by La Libre, that could happen through asset sales, a capital increase or new borrowing. Oddo BHF analysts say two profit warnings within a few months will not restore confidence. Full half-year results follow on 17 November.