Alstom Full-Year Profit Rises on Boost From India Rail Orderby
Order book hits a record as focus moves to emerging markets
Sales of energy assets to GE reduced debt after share buyback
Alstom SA’s full-year profit surged after the French rail-equipment maker got a boost from an Indian order for electric locomotives that pushed its pipeline of contracts to a record.
Adjusted earnings before interest and taxes increased 23 percent to 366 million euros ($417 million) in the fiscal year through March, the company said Wednesday in a statement. Sales on a comparable basis climbed 7 percent to 6.88 billion euros, beating a reiterated target for annual growth of 5 percent through 2020 and an analyst estimate of 6.71 billion euros compiled by Bloomberg.
Alstom sold most of its energy assets to General Electric Co. last year and completed a share buyback of about 3.2 billion euros with some of the proceeds. The Saint-Ouen-based company has reduced its net debt to 200 million euros at the end of March compared with 3.1 billion euros the previous year and plans to concentrate on emerging markets.
"Our first priority is the implementation of our organic strategy, our second priority is to continue to make small and medium acquisitions to accelerate this strategy," Chief Executive Officer Henri Poupart-Lafarge told reporters during a conference call.
The shares added 1.5 percent to 22.24 euros as of 9:07 a.m. in Paris.
Alstom’s biggest contract last year was worth about 3.2 billion euros to supply 800 electric locomotives to Indian Railways. Earlier this year, it started expanding on the African continent with the inauguration of a locomotive factory in South Africa to produce equipment for its biggest-ever rail contract.
The order book for the latest financial year rose to a record 30.4 billion euros including a 12-month intake of 10.6 billion euros compared with a previous-year 10.1 billion euros, according to the statement. A third of the total for last year came from services.
“A certain number of countries, notably oil-producing ones, have financing issues that are more important than before the decline in oil prices,” the CEO said.
Revenue for signaling services grew 30 percent over the last year thanks to the acquisition of GE Signalling and SSL in the U.K., as well as projects in France and in Spain, the company said. It aims to sell more transport services like signaling, safety and maintenance.
The company confirmed 2020 financial goals including for an average adjusted ebit margin of 7 percent and the conversion of all net income into free cash flow from 2020.
Net income reached 3 billion euros, lower than a 4.1 billion estimate compiled by Bloomberg. "We’re having difficulties to predict the level of our net income" due to the GE operation, the CEO said.