Alstom recovery gathering speed

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Alstom emerged from its controversial bail out by the French government on Tuesday as it reported a 10 per cent rise in sales for the first three months of the year.

In the quarter to the end of June, sales at the maker of Eurostar and TGV trains reached €3.56bn ($4.3bn), compared to €3.2bn last year; orders were up about 1 per cent at €3.98bn.

Patrick Kron, chief executive, said: “This performance reflects both an appropriate selectivity on orders and the registration of a large number of mid-sized contracts in power and transport.”

“The sales are recovering from the low point reached in the first part of last year, supported by the rebound of orders,” he added.

Last year, the French government paid €2bn to pull the engineering group back from the brink of collapse. A row with the European Union competition regulator followed over the bail-out and Paris was forced to instigate reforms of its government procurement policies for transportation, energy, water and postal services to avoid legal action.

Orders at the power turbo-systems/power environment division rose 7 per cent to €1.3bn while sales were up 30 per cent. The sharp rise reflected low sales in the equivalent period last year. Transport orders were also strong, with orders of €1.5bn including a locomotive contract in China and regional trains in France; sales rose 6 per cent to €1.3bn.

However, power service orders fell 5 per cent to €884m while sales fell 4 per cent to €718m as the division failed to land an operation and maintenance contract in the quarter. The marine division was also hampered by the failure to finalise a new contract as orders fell 63 per cent, although a contract for two cruise ships is expected in the second quarter. Sales fell 14 per cent to €143m although revenue at the division is phased across different periods.

In early trade, shares in Alstom were down by more than 1 per cent at 87 cents. The share price has risen almost 60 per cent so far this year.

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