September 6, 2018 / 9:06 AM / 3 months ago

UPDATE 1-France's Altran free cash flow woes overshadow reassurance on forgery incident

(Adds details, analyst comments)

Sept 6 (Reuters) - French technology consultancy Altran said on Thursday a forgery incident at its U.S. business was an isolated event, but that failed to reassure investors, who were spooked by Altran’s falling free cash flow.

Its shares were down 6 percent as at 0817 GMT, having initially risen around 4 percent in early trade.

Altran reported a 225 million euro ($261.79 million) free cash flow loss at the end of June, compared to a loss of 14 million euros year ago.

This was worse than the consensus expectation of a 74 million euro loss, Kepler Cheuvreux said.

Altran pointed to cash outflows related to Aricent’s acquisition, new cash items induced by Aricent and working capital variation as reasons behind the significant difference.

In July, Altran discovered $10 million of forged purchase orders at its recently acquired Aricent, which happened prior to the acquisition.

“Following the external investigation, the forgery is confirmed to be an isolated event,” Altran Chairman and Chief Executive Officer Dominique Cerutti said.

Aricent contributed 16.9 percent of the group’s operating margin in the first half, which jumped 28.8 percent to 138.5 million euros, Altran said.

The French firm said it implemented a plan to restore Aricent’s margin profile and expects it to be fruitful by the end of the year.

$1 = 0.8599 euros Reporting by Camille Raynaud in Gdynia; Editing by Muralikumar Anantharaman and Emelia Sithole-Matarise

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