Bombardier turns annual profit for first time in 5 years as train woes continue

MONTREAL — Bombardier Inc. turned a profit in 2018 for the first time in five years as it ramped up train revenues despite several project derailments and lowerthan-expected margins.

The mixed rail results prompted Bombardier to decrease ownership of its train business, which is its highest-grossing division, by 2.5 per cent to 70 per cent.

That means further delay of the Montreal-based company’s buyback of the Caisse de depot’s

now-30 per cent stake — valued at more than US$2 billion — in the rail segment.

Chief executive Alain Bellemare acknowledged there are a half-dozen train projects “that have been a drag,” but said that “there’s no systemic issue here.”

“I understand it’s creating

disappointment,” he added.

Bombardier’s train unit raked in US$8.9 billion of the company’s US$16.2 billion in revenues in 2018, with a margin of 7.7 per cent on earnings before interest and tax, below last year’s 8.4 per cent and the 8.9 per cent expected by Desjardins Securities.

Fourth-quarter rail revenues dropped 10 per cent year over year to US$2.16 billion.

Bombardier announced a leadership shakeup at the train unit last week, naming Danny Di Perna as the new head to replace Laurent Troger, who took on the role in December 2015.