In brief

• Alstom shares fell sharply in Paris on Monday after the French train maker cut its full-year profit forecast.
• The stock fell as much as 27% at one point during the session, with reported declines ranging from 26% to 28%.
• The cut is the second major profit warning under CEO Martin Sion, and the company plans to cut €2bn of debt.
• Delays on German projects and problems with the Coradia Max were cited as the main causes.

Shares slump in Paris

Alstom shares fell sharply in Paris on Monday after the French group lowered its profit forecast for the full year. Puls Biznesu reported that the stock fell as much as 27% at one point during the session (Akcje Alstomu gwałtownie tracą. Francuski producent pociągów drastycznie obniża prognozy – Puls Biznesu). Financial Times put the drop at 26% (Alstom shares tumble 26% after train maker cuts profit forecast – Financial Times), while Investing.com reported 28% (Alstom shares sink 28% after outlook cut on Coradia Max execution issues – Investing.com). The cut is the second major profit warning under chief executive Martin Sion.

Delays and penalties

The company linked the forecast cut to delays on projects in Germany. Those delays led to contractual penalties and weaker profitability. Problems with the Coradia Max, Alstom's flagship train family, were cited as the main execution issue behind the downgrade (Krew na akcjach Alstomu. Problemem pociągi, które za miliardy zamówiło PKP Intercity – Bankier.pl).

Debt plan and reorganisation

Alstom said it will reorganise its business and set out a plan to cut €2bn of debt.

Link to Poland

PKP Intercity recently signed a contract worth close to 7 billion zloty for the Coradia Max, the same model at the centre of the problems.