Alstom Quarterly Orders Fall 36% as Utilities Delay Power-Plant Investment
21.07.2010 (17:37) | Bloomberg
In transport, the market remains sound, offering a number of opportunities.- - - - - - - - - - - - - - - - - - - - - -
Alstom SA, the world’s third- largest power-equipment maker, said orders in the April to June period slumped 36 percent as utilities continue to postpone the construction of power plants.
Orders for the fiscal first-quarter dropped to 3.07 billion euros ($3.99 billion) from 4.77 billion euros a year earlier, the company, based near Paris, said in a statement today. Revenue fell 1 percent to 4.74 billion euros, in line with the median estimate of seven analysts polled by Bloomberg.
“Despite the busy tendering activity, the group still faces challenges to register large orders as customers continue to delay investment in new power plants,” Chief Executive Officer Patrick Kron said in the statement.
Alstom completed the acquisition of Areva SA’s power transmission unit in June to gain market share in countries including India as European customers struggle to recover from the economic slump and competition in China intensifies. The company said the grid unit will be consolidated in first-half results, accounting for four months.
New orders for power systems and services dropped 35 percent in the April to June period to 1.95 billion euros, and sales fell 6 percent to 3.17 billion euros. New orders for transport equipment slumped 37 percent to 1.12 billion euros, while sales rose 9 percent to 1.57 billion euros.
“In transport, the market remains sound, offering a number of opportunities,” Kron said.
Profitability Forecast
The company today reiterated its May forecast that that profitability will weaken over the next two years because utilities are adopting a “wait and see attitude” toward projects. Operating profit margins at the French supplier of turbines and coal-fired generators will narrow to between 7 percent and 8 percent over the next two fiscal years, down from 9.1 percent in the fiscal year ended in March, Alstom said.
The company, which also makes high-speed trains and trams, agreed on March 1 to buy 25 percent of Russian rail-equipment maker Transmashholding to increase its presence in Europe’s biggest railway market
General Electric Co. and Siemens AG are the world’s largest power-equipment makers, according to Bloomberg data.
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