Alstom signals turnaround, confidence for future

17th May 2006, Comments 0 comments

PARIS, May 17, 2006 (AFP) - French engineering group Alstom reported on Wednesday its first full-year net profit for four years, marking a sharp turnaround after a deep restructuring and near-collapse in 2004.

PARIS, May 17, 2006 (AFP) - French engineering group Alstom reported on Wednesday its first full-year net profit for four years, marking a sharp turnaround after a deep restructuring and near-collapse in 2004.

The French group, which has overhauled its business with the help of French state aid, said that its net profit in the 12 months to the end of March was EUR 178 million from a loss of EUR 628 million the previous year.

In upbeat remarks about Alstom's prospects, chief executive Patrick Kron said the company would pay a dividend this year, would be interested in an alliance with French nuclear group Areva and would begin to look for acquisitions in the energy and transport sectors.

He also said that French construction group Bouygues would complete in June the acquisition of a 21-percent stake in Alstom, currently owned by the French state. Bouygues is to pay EUR 1.98 billion for the shareholding.

The operating margin of Alstom, which rose to 5.6 percent in the year to March from 3.6 percent the previous year, would reach seven percent in the full year to March 2008, he said.

"The ongoing cash generation should allow the company to further reduce debt, reward shareholders and initiate a programme of external growth by selected acquisitions," Kron said.

On the Paris stock exchange in late morning trading, shares in the company were showing a gain of 2.01 percent to EUR 76.25 in a broadly higher market.

The overall Alstom group, which contained power engineering and shipbuilding, came close to bankruptcy in 2004 and was the subject of a rescue plan orchestrated by the French state.

Alstom received more than EUR 2 billion in state aid coupled with assistance from creditor banks, but the French government and the company were obliged to accept conditions imposed by EU competition authorities, including requirements to sell some activities and for the French state to sell its stake by 2008.

Kron said that all the divestments required by the EU had been made or were nearing completion and analysts at CA Cheuvreux said the results showed that the restructuring was nearly over.

The figures for Alstom's shipbuilding division were excluded from the results following the sale of a 75-percent stake in the company, Chantiers de l'Atlantique, to Norwegian shipping group Aker Yards. The deal is set to be completed in May after approval from EU competition authorities.

Kron also signalled his willingness to form an alliance with the nuclear energy businesses of state-owned French group Areva.

"If there are opportunities for doing things in common with Framatome, that would make sense," Kron said, referring to the nuclear products and services division of Areva.

Alstom sales in the year to March totaled EUR 13.41 billion from EUR 12.92 billion the previous year.

Net debt totalled EUR 1.25 billion from EUR 1.65 billion a year earlier.

"We no longer have the problem of indebtedness," said Kron.

Copyright AFP

Subject: French news

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