Train manufacturer Stadler Rail makes less operating profit while maintaining turnover
Train manufacturer Stadler Rail maintained stable turnover in the first half of the year, but earned significantly less in operating terms. Incoming orders also shrank significantly.
28.08.2024, 08:32
SDA
Overall, Stadler achieved a turnover of 1.29 billion Swiss francs, as the eastern Swiss company announced in a communiqué on Wednesday. This is a very slight increase of 0.3 percent compared to the same period last year.
However, operating profit EBIT fell by 41 percent to 28.2 million Swiss francs. The operating profit margin deteriorated to 2.2 percent from 3.7 percent in the previous year.
Higher costs for development, sales and administration had a negative impact. "It should be noted here that these costs do not develop in proportion to net sales", the Group wrote: "These expenses largely include fixed costs, while the corresponding sales and contribution margins are booked with a delay of several years due to sales recognition."
In contrast, net profit rose by 7 percent to CHF 27.5 million. A positive interest result and positive currency effects supported the Group result. Taxes were also lower than in the same period of the previous year.
Order intake weaker
Incoming orders were also not as high as a year ago. Stadler received orders totaling 2.5 billion Swiss francs in the first six months. In the previous year, a huge order from Kazakhstan had boosted order intake to 4.7 billion Swiss francs. In contrast, "in the first half of 2024, there were several postponements of contract signings to the second half of the year," Stadler wrote.
Nevertheless, the order book is thicker than ever before: the order backlog reached a new all-time high of 26.8 billion Swiss francs in the middle of the year after 24.4 billion at the end of 2023.
Stadler's figures fell far short of the financial community's expectations in terms of operating profit and EBIT margin. Incoming orders were also slightly below expectations. On the other hand, analysts' forecasts were met in terms of turnover and even slightly exceeded in terms of net profit.
Flooding hinders suppliers
Stadler had bad luck with its supplier Constellium, which manufactures aluminum structural profiles for car bodies. Due to flooding at two of Constellium's Swiss production sites, production was interrupted and deliveries were delayed.
Stadler is working closely with Constellium to ramp up production at another location, it said: "In addition, internal countermeasures have been introduced to compensate for possible delivery bottlenecks in the affected orders as best as possible."
Constellium currently assumes that production can be ramped up again by the end of October at the earliest. If no further significant delays occur, Stadler confirms the outlook for the years 2024 to 2026 unchanged.
Financial targets unchanged
For 2024 as a whole, the Group expects sales of 3.5 to 3.7 billion Swiss francs and an EBIT margin at a comparable level to 2023 (5.1 percent).
Nevertheless, turnover is expected to increase significantly next year: Stadler then expects sales of between 4.0 and 4.2 billion Swiss francs and an EBIT margin of around 7 percent. In 2025, Stadler also expects investments of around 200 million Swiss francs.
In connection with the strong increase in the number of vehicle acceptances, Stadler is targeting sales of between CHF 5.0 and 5.5 billion in the 2026 financial year with an EBIT margin of between 7 and 8 percent and investments of around CHF 200 million.
Stadler remains convinced that an EBIT margin of 8 to 9 percent can be achieved in the medium term under normal economic conditions, the statement continued. The Group is maintaining its dividend policy with a payout of around 60 percent of consolidated net profit.
