CAF Strengthens Latin American Presence with New Contracts Worth Over €200 Million

CAF has secured contracts worth over €200 million in Colombia and Chile, focusing on metro system enhancements. The company aims for a 10% sales growth in 2024 following recent recovery signs in revenue. Despite earlier financial losses, CAF’s contracts with metro operators bolster its strategic growth in Latin America.

CAF has recently secured two significant contracts in Latin America, specifically in Colombia and Chile, totaling over €200 million. In Colombia, the company will collaborate with the Medellín metro operator for the design, manufacture, assembly, and testing of 13 new trains for the metro system. This follows a successful history where CAF supplied 38 trains and refurbished an additional 42 for Metro Medellín. Meanwhile, in Chile, CAF has signed an agreement with Metro Santiago to provide and maintain six five-car trains equipped with automatic driving technology, building on a legacy of 80 trains previously manufactured for this metro system. These contracts not only bolster CAF’s presence in the region but also complement its existing engagements in Brazil, Mexico, Argentina, Venezuela, and Ecuador.

The recent contracts are expected to enhance CAF’s order book significantly. In addition to these new projects, CAF has entered a contract worth €412 million with Metro de Madrid to renew its train fleet. As a result, the company has concluded the first nine months of the year with an order intake of €2,245 million and a backlog of €13,527 million, despite experiencing challenges reflected in a 52% drop in net profit during Q3. However, CAF indicated a positive turnaround with a 7% revenue increase in October, affirming its growth predictions for the full financial year ahead.

For 2024, CAF aims for a 10% increase in sales, an improvement in its EBIT margin compared to 2023, and stable debt levels. The firm anticipates that its subsidiary, Solaris, will also report strong growth, including a 10% sales increase in the final quarter. The company is committed to maintaining a dividend growth aligned with its results.

CAF, a prominent manufacturer of railway vehicles, has expanded its operations in Latin America over the years and previously established contracts with various metro systems in the region, enhancing urban mobility through innovative solutions. The contracts with Colombia and Chile mark a substantial escalation of their endeavors, following a broader strategy aimed at increasing production and securing long-term growth. Despite recent financial difficulties, CAF is optimistic about its strategic directions and market presence, aiming for sustainable growth through new contracts and operational efficiency. These developments are integral in light of the challenges faced in 2023, including reduced profitability and fluctuating revenues.

CAF’s recent contract acquisitions in Colombia and Chile signify a promising advancement in its Latin American operations, totaling €200 million. While the company faced significant financial setbacks in Q3, its recovery in October and clear growth objectives for 2024 reflect a resilient posture. The diversification of contracts, including recent renewals with Metro de Madrid, positions CAF favorably for future expansion and profitability in an evolving market.

Original Source: thecorner.eu