Alstom posts first profit since 2001 on rail, power sales

Paris, May 17 | Updated: May 18 2006, 05:30am hrs
Alstom SA, the worlds biggest maker of high-speed trains, reported the first annual profit since 2001 and said its ready to resume growth through acquisitions as sales of rail equipment and power stations surge.

Net income was 178 million euros ($229 million) in the 12 months ended March 31, compared with a year-earlier loss of 628 million euros, Paris-based Alstom said in a statement on Wednesday. Sales advanced 4% to 13.4 billion euros.

Alstom is entering a new phase, chief executive officer Patrick Kron said in the statement. Cash generation should allow the company to further reduce debt, reward shareholders and initiate a programnme of external growth by selected acquisitions.

Alstoms order backlog jumped 9% in the year after a state-led bailout saved the company from bankruptcy and restored customer confidence in its power turbines and trains. Kron, who halted losses by selling a third of Alstoms business and shedding half the workforce, said a 2 billion-euro investment by French builder Bouygues SA will aid future growth.

Alstoms market value has climbed to 10.5 billion euros from 273 million euros in March 2003, when the company was close to default.

Alstom also returned to second-half profit, posting net income of 42 million euros from a 386 million-euro loss, spo-

kesman Philippe Kasse said. Full-year earnings were short of the 192 million-euro median estimate of eight analysts surveyed by Bloomberg. The analysts predicted a figure of 56 million for the second half.

Kron, 52, sold Alstoms power-networks division and is exiting shipbuilding, leaving the company with 60,000 employees. 60% of sales now come from power equipment, the rest from a rail unit that has built two-thirds of the worlds high-speed trains.