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Investing.com -- Stadler (SIX:SRAIL) faced one of its most challenging years in 2024, with three major environmental disasters causing substantial delivery delays and negatively impacting their financial performance, as was reported on Wednesday.
Severe weather events, including flooding in Switzerland and Spain, and a dam failure in Austria, caused significant disruptions, forcing a company to delay CHF 350 million in sales.
This resulted in a substantial decline in earnings before interest and taxes, which fell to CHF 100.5 million from CHF 183.3 million, and a drop in the EBIT margin from 5.1% to 3.1%
The company’s order backlog grew to CHF 29.2 billion, driven by CHF 6.4 billion in new contracts.
Sales revenue totaled CHF 3.3 billion, a 10% decline from the previous year’s CHF 3.6 billion, largely due to production disruptions and supply chain challenges. Net profit fell to CHF 55 million from CHF 138.6 million.
Production delays in Valencia led to 200,000 lost hours, requiring supply chain restructuring. The company initiated a catch-up program to minimize delivery delays of one to five months across approximately 50 orders.
The Swiss railway rolling stock manufacturer’s Signalling segment saw expansion, with order intake rising to CHF 520.1 million from CHF 56 million in the previous year.
A key driver was a $500 million contract for a train control system for the Atlanta metro in the United States, marking a breakthrough in the American market.
Meanwhile, operations in Germany continued to face economic pressure, exacerbated by supply chain disruptions, inflation, and rising salary costs.
Stadler implemented an efficiency program aimed at improving competitiveness at its Berlin-Brandenburg plants, which have also been affected by past contract delays and pandemic-related interruptions.
Stadler remains a leader in battery and hydrogen-powered trains, which make up 50% of all such rail vehicles sold in Europe. The FLIRT train series also continued to perform well, with total sales reaching 2,750 units since its initial launch.
Stadler expects production output to increase substantially, projecting revenue to surpass CHF 5 billion by 2026.
Assuming stable supply chains, the company anticipates EBIT margin recovery to between 4% and 5% in 2025, with a long-term goal of 6% to 8%.
Given the lower earnings in 2024, the Board of Directors has proposed a dividend of CHF 20 million (CHF 0.20 per share), a reduction from CHF 90 million (CHF 0.90 per share) in the previous year.