Alstom operating profit jumps

May 15, 2001
Web Posted at 0849 GMT

PARIS, (Reuters) - French energy and transport company Alstom's annual operating profit jumped to 1.15 billion euros, broadly in line with expectations, helping margins rise to 4.7 percent from 4.5 percent, the company said on Tuesday.

Pro forma net income in the year to March 31 fell to 204 million euros from 349 million a year earlier, slightly below a consensus estimate of 232 million euros from the JCF Group.

Analysts had pegged operating profit at 1.1 billion euros.

Analysts had been expecting a decline in bottom line profit due to the absence of one-off capital gains -- Alstom had a net 158 million euro gain in fiscal 2000 -- and exceptional charges linked to problems with gas turbines.

Alstom shares rose and at 0718 GMT were up 2.16 percent at 32.12 euros, outpacing the French blue-chip index which was up 0.2 percent at the time.

“Although our operating income rose, we still feel that we can significantly improve the profitability of our businesses,” Alstom Chairman Pierre Bilger said in a statement. He stuck to his goal for operating profit to represent six percent of sales in the 2002/2003 fiscal year.

The company's profit before goodwill writedowns came in at 564 million euros, down from 593 million a year earlier. Orders grew 11 percent on a like-for-like basis to 25.73 billion euros, while sales rose a like-for-like 15 percent to 24.55 billion.

As expected, Alstom confirmed on Tuesday the sale of its electrical installation contracting unit to a management buyout team for 770 million euros.

Alstom has gradually shed non-core businesses to concentrate on power generation and distribution and rail equipment which, together, now account for 80 percent of sales.

Last May it bought the 50 percent it did not own in ABB Alstom Power from Swiss/Swedish partner ABB AB, creating the world's biggest builder of steam turbines and complete power stations. Alstom consolidated 100 percent of the division's sales for the final three quarters of the year.

The 1.25 billion-euro cash transaction left the company's debt at 1.216 billion euros at the end of March, compared to 831 million in March 2000.

It also brought problems, in the shape of faulty GT24/26 gas turbines, inherited from ABB, that cost the company 903 million euros in spare parts and repairs, charged against first-half earnings.