French giant Alstom reports sales rise as GE deal nears completion

 
Caitlin Morrison
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French transport firm Alstom is in the final stages of selling its power equipment unit to GE
French energy and transport group Alstom reported sales of €4.6bn (£3.5bn) in the first nine months of the 2014-15 financial year, up 12 per cent on the figure for the previous year.

For the third quarter alone, sales stood at €1.5bn, up 10 per cent organically compared to the same period last year.

The company said this was “mainly fuelled by deliveries of regional or mainline trains in France, Germany and Italy as well as by high-speed trains in Switzerland and Poland and tramways in Dubai”.

Alstom, which is in the process of selling most of its power equipment business to General Electric (GE), also grew its order intake, up 52 per cent from €5.3bn to €8bn. However, orders were down in the third quarter of 2014-15, at €1.6bn, compared to €2.5bn in the same period of 2013-14, when the company booked the Riyadh metro project in Saudi Arabia.

Patrick Kron, Alstom’s chairman and chief executive, said: “The third quarter 2014-15 showed a good level of orders, fuelled by small to mid-sized contracts. Sales grew at a steady pace.”

He also noted that shareholders had showed “strong support” for the GE transaction at a meeting in December, with over 99 per cent of the vote in favour of the deal, which is expected to close mid-2015. Alstom also said it had struck additional commercial agreements with GE worth €400m.

In December, Alstom pleaded guilty to charges of bribery by the US Department of Justice (DOJ), and must now pay a penalty fine of $772m. The firm admitted to giving money to government officials in countries such as Indonesia, India and China, in order to win business from them.

The US DOJ has required that Alstom, not GE, pay the fine, and the DOJ’s deputy general James Cole said he wanted it to serve as a warning to other firms.

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