(The Associated Press circulated the following article on June 1.)
PARIS — French engineering company Alstom SA said Tuesday that it more than halved its full-year net loss and reiterated plans to return to profit in the current fiscal year.
For the 12 months ending March 31, Alstom’s net loss shrunk to 865 million euros ($1.08 billion) from a loss of 1.84 billion euros in fiscal 2003-2004.
Investors welcomed the results, and shares in the turbines, ships and trains maker had jumped 4.4 percent to 72 euro cents (90 cents) shortly after midday in Paris.
Alstom’s operating margin rose to 4 percent of sales from 1.2 percent, but sales fell 4 percent to 13.6 billion euros ($17 billion) due to a low level of orders in the first half of the fiscal year.
Alstom Chairman and Chief Executive Patrick Kron, who was hired in early 2003 to implement a turnaround plan, reiterated targets he set at the time, saying the company would return to profit in fiscal 2005-2006, generate positive cash flow and boost its operating margin to 6 percent.
The upbeat results follow a massive restructuring of the French engineering group, which was almost dragged into bankruptcy when problems with a power turbines acquisition led to a massive compensation and repair bill, also damaging client confidence. The restructuring includes 11,500 planned job cuts and asset disposals, some of which have been necessary for European Union approval of a 2 billion euros ($2.5 billion) bailout of the company.
The rescue included 1.3 billion euros ($1.62 billion) in guarantees on Alstom bonds from the French state, which owns 21 percent of the company.
The bailout and asset sales helped Alstom cut its net debt to 1.4 billion euros ($1.75 billion) at the end of March from 3.7 billion euros the year before. The company said it now seeks to sell its power conversion unit, as well as the industrial boiler unit it had already said it plans to shed.
”When we closed the 2003 accounts, the situation was dramatic,” said Kron. ”When we closed last year, it was uncertain. Today, it’s encouraging.”
Kron said that after this year’s planned return to profit, Alstom will seek acquisitions in the transport and energy markets to fuel further growth.
He denied speculation that the company is in talks with either French nuclear power company Areva, which the government persuaded to help out with Alstom’s rescue by buying a power equipment unit, or German conglomerate group Siemens AG, its biggest competitor in the train and turbines business.