CAF consolidates alliance with Mitsubishi with award of new €150M contract in Philippines for North-South commuter line

CAF factory

Intermoney: The company informed the CNMV (National Securities Market Commission) on Friday that it has been chosen by Mitsubishi as subcontractor for the design and supply of seven electrical units in the Philippines. Specifically, the units are for the new North-South commuter rail line that will connect Clark International Airport, northeast of Manila, with the province of Laguna in the south of the island of Luzon. The project is expected to cost around €150 million.

CAF thus consolidates its collaboration with the Mitsubishi Corporation, which opened the door to Asia with another contract a few months ago, also in the Philippines, for a similar amount.

Previously, the multinational contacted CAF to supply automatic units for the Istanbul metro and the construction of a transport system in Canberra. In addition, they reinforce their presence in the Philippine market, one with great potential in the APAC region, of special interest to CAF, due to its higher growth compared to Europe.

Assessment: Positive news as it allows CAF to increase its presence in Asia, a strategic market for them in the coming years, although with a limited impact due to the size of the contract (it barely represents 1% of the group’s portfolio). This contract brings CAF’s backlog to €13.5bn and reflects its strong contracting capacity so far this year (€2.8bn, excluding €800m of contracts awarded but not signed), with a book-to-bill ratio of more than 1x. CAF published in its latest results an improvement in sales guidance for FY23, in addition to complying with the announced margin improvement.

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