Orders are on the up at Alstom though the company’s operational performance was affected by low sales in line with expectations.
Between April and September this year the company, which is involved with the power generation, rail transport infrastructure and electricity transmission sectors, booked a sound level of orders at €10.2 billion.
This was up 45 per cent compared to the first half of last year, confirming the recovery achieved in the second part of 2010/11.
Over the same period, sales amounted to €9.4 billion, down 10 per cent, reflecting the low level of orders taken during the last economic downturn.
Income from operations decreased to €627 million, corresponding to a margin of 6.7 per cent.
The net result stood at €363 million, whilst the free cash flow was negative at €(914) million, due to the low sales and some non-recurring events.
Patrick Kron, Alstom’s chairman & chief executive officer, said: “The commercial rebound was confirmed during this first half with orders exceeding €10 billion and a book-to-bill above 1 for the fourth consecutive quarter.
“As announced, the low turnover of this period, reflecting the trough in orders taken during the 2009 crisis, negatively impacted both profitability and cash.
“The second half of the year should be characterised by an improved volume of sales, a higher operating margin, as well as a positive free cash flow.
“Based on this analysis, we are able to confirm our operating margin forecast of 7-8 per cent for the fiscal year 2011/12.
“In terms of commercial activity, mature markets remained slow, impacted by the lack of visibility in the current economic environment, while the emerging markets continued to benefit from the favourable trends already noticed; our recent successes in these regions give us confidence to maintain a sustained level of orders in our four sectors.”