Wednesday May 7, 11:10 AM
Alstom infrastructure boom boosts annual profits by half
PARIS (AFP) - French engineering giant Alstom (Paris: FR0010220475 - news) reported a 56-percent rise in net profit for its last financial year on Wednesday and said orders had reached record high levels because of strong global demand for infrastructure.
The group, which sells turbines for power stations and the TGV high-speed train on world markets, said that profit margins would improve in the 2009-2010 year.
Alstom said that net profit in the 2007-2008 year had risen to 852 million euros (1.32 billion dollars).
The group was rescued from the verge of bankruptcy in 2004, but is now in the spotlight of French and Swiss investigations into alleged contract bribery under previous management.
Given the strength and quality of the order book, the operating margin should be about nine percent at the end of the financial year in March 2010 instead of eight percent forecast previously, the company said.
In the 2007-2008 year, operating profit rose by 35 percent from the figure for the previous period to 1.29 billion euros.
Sales rose by 19 percent to 16.9 billion euros owing to a 37-percent rise in sales by the Power Systems division, 13 percent by the Power Service activities and four percent by the transport sector.
The profit margin was 6.7 percent, undershooting the group's forecast of 7.5 percent.
Orders taken in the year amounted to 23.47 billion euros, an increase of 23 percent in the space of a year, and the whole order book was now worth 39.2 billion euros representing 28 months of sales.
Chief executive Patrick Kron said: "The year was marked by a record level of orders in our two activities of power and transportation, which reflects our good position on the growing market for infrastructures."
The group said it had a net cash position of 904 million euros in contrast to debt of 64 million euros a year ago.
The board recommended doubling the dividend to 1.60 euros and splitting the shares in two.
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