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Talgo earns 5.3 million in the first quarter, 28% less, due to the impact of the virus

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The train maker Talgo It has presented a drop of 28.8% in its profit for the first quarter, to 5.3 million euros, due to the negative impact of the coronavirus.

Although their income They have rebounded almost 30%, to 112.8 million euros, compared to the same period last year. However, the Provisioning costs have soared 124%, to 63 million, which has reduced the quarterly Ebitda by 3%, to 13.9 million; and the Ebitda margin up to 12.3% from 16.4%.

Talgo has recognized that the train maintenance activity "It has been seen significantly impacted"and that" the recovery will depend on the ability of our clients to resume a normal commercial operation, whose forecasting is currently difficult due to lack of visibility"

This is the division in which Talgo approved an ERTE for 313 workers which it plans to maintain until "activity recovers".

In manufacturing, the company has registered "delays in the supply chain", in addition to the stoppage of activity decreed in Spain in the first fortnight of April. Talgo has ensured that it is in contact with the customers for which it manufactures trains to inform them of the impacts that this slowdown will have on the vehicle delivery schedule.

It is the case of Renfe, to which it has already communicated that it will deliver the first units of the new AVE in the last quarter of 2021.

The company chaired by Carlos de Palacio has detailed that during the past months of March and April designed contingency plans and "relevant" cost savings in a "transversal" way in order to "protect the margins of the projects from the conjunctural impact" of the crisis. These cuts include that of the remuneration of the company leadership.

Financially, the company claims to have strengthened its capabilities, given that has available credit lines of up to 135 million, compared to 90 million at the end of the year. In addition, it has refinanced all the debt maturities expected for 2020.

Regarding his backlog portfolio to undertake, Talgo won new contracts worth 141 million in the quarter, which at the end of the period stood at € 3.4 billion, of which 1,200 million correspond to manufacturing.

In addition, the company is currently working on fifteen eventual contract opportunities, valued at a total of 8.5 billion, among them those of the AVE in the United Kingdom and several orders for commuter trains for Renfe in Spain.

In this sense, Talgo considers that the current crisis could generate "certain delays" in the processes of awarding these orders, but do not foresee "substantial modifications or cancellations" in them.

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