Alstom shares fall over 25% after profit warning

Alstom shares fell more than 25 percent in Paris on Monday after the French train maker warned that further delivery and production problems would reduce its profitability this year.

The company said additional technical issues and testing requirements had emerged for its new Coradia Max trains. It now expects to build about 4,000 rail cars this year, down from an earlier target of 4,400 to 4,500.

Alstom said its operating margin fell to negative four percent in the fiscal first half to the end of September, while free cash flow was negative at 1.5 billion euros. It now expects full-year margins to recover to one percent, instead of 6.5 percent.

The warning was the second since Martin Sion took over as chief executive in April. Sion said he had ordered a rigorous review of project risks and opportunities, with dedicated expert teams assigned to critical projects including Coradia Max.

Alstom said its near-term priorities include improving manufacturing and engineering practices, resolving operational issues more quickly, increasing project manager accountability and simplifying processes. It said key decisions would be made by early 2027 and that it aimed to cut debt by about 2 billion euros over the next year.