Intermoney | The company (Buy, PO €42) strengthens its presence in Latin America with two new contracts in Colombia and Chile, which together amount to more than €200m. In the case of Colombia, it is a contract with the Medellín metro operator for the design and manufacture of 13 trains for its metropolitan network, as well as their final assembly and testing in the metro network; between 2008 and 2018 it had already supplied 38 trains to Metro Medellín and recently took charge of refurbishing another 42 units. In Chile, it has signed a contract with Metro Santiago for the supply and maintenance of trains for the Chilean capital, where CAF has already manufactured a total of 80 trains; this latest order involves the manufacture and maintenance of six five-car trains, all of them with automatic driving systems and CAF’s Inneo platform.
Assessment: positive news for CAF. These orders are in addition to those it already has in place – for the supply, maintenance and concession of rolling stock – in Brazil, Mexico, Argentina, Venezuela and Ecuador. It also joins the one it signed a few days ago with Metro de Madrid to renew its fleet of trains for €412 million. With these latest orders with Metro de Madrid and the Santiago and Medellín metro systems, CAF has managed to boost its order book. CAF ended the first nine months of the year with order intake of €2,245m (-17% against 9M’24) and a backlog of €13,527m (-5% year-on-year).
Q3 results (revenues -2%, EBIT -19%, net profit -52%) were well below our and consensus estimates, although in October the company stated that the situation had been reversed and revenues had increased by 7%, growth that it expected to accelerate and meet guidance for the full year. For 2024, the company’s objectives include: 10% growth in sales (against 9.5% consenso and 10% IMVe) and improving its EBIT margin versus 2023 (4.7%, sgsindt 5% IMVe and 5.2% consenso), as well as keeping debt stable compared to this year. The dividend will grow in line with results. Solaris is expected to grow strongly in Q4 to end the year with 10% growth in sales (against a 4% drop in 9M24).
