Ascom’s fortunes boosted by French railway deal
Ascom’s efforts to restore its balance sheet show signs of bearing fruit, after the technology group announced its second big deal in as many weeks.
On Tuesday the Bern-based firm said it had signed a €50 million (SFr77 million) deal to supply the French rail operator, SNCF, with automated train station gates.
The ten-year contract with SNCF follows a similar order from transport authorities in Montreal, Canada, worth SFr67 million.
Analysts believe the two deals are a sign that the debt-laden firm may be turning a corner.
“It’s very positive,” Panagiotis Spiliopoulos, an analyst at Bank Vontobel, told swissinfo.
Ascom has been cutting its debt by shedding assets purchased during the 1990s boom years and attempting to refocus on its core business.
Last year the former high-flyer posted a SFr281 million loss, after reporting an even bigger loss of SFr396 million in 2001.
Along with slashing hundreds of jobs, the firm has also been fighting to restore investor trust, badly battered after its share price collapsed by more than 50 per cent.
Regaining trust
News of the latest deal pushed shares in Ascom up 5.8 per cent on Tuesday to SFr7.82.
In recent weeks, the firm’s Swiss-listed shares have surged by more than 15 per cent – close to a 12-month high – amid hopes of a turnaround.
Spiliopoulos said Ascom’s rising share and bond prices suggest investors are regaining trust in the company.
“On the one side, they still have a need to sell big divisions,” said Spiliopoulos.
“On the other they have these deals. But the real test will be when Ascom releases its figures for the first half of 2003. We will then see how profitable these new deals are,” he added.
Ascom has recently sold off two of its biggest underperforming assets as part of a cost-cutting drive.
Earlier this month, it announced the sale of its PBX division to the Canadian company, Aastra Technologies, for SFr35 million.
That followed a deal in April involving the sale of its Energy Systems division for SFr150 million to a Thai company.
swissinfo, Jacob Greber in Zurich
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