Alstom Orders Decline as Revenue and Margins Remain Stable

The Tip Desk · September 30, 2013 · 2 min read

The rail and power company reported a 20% drop in comparable orders for the first half of the fiscal year.

Alstom recorded 9,431 million euros in orders during the first half of the 2013/14 fiscal year, a 20% decrease on a comparable basis compared to the same period in the previous year,. The company said the result reflected a limited number of large projects and a sustained level of small and medium orders.

Order intake fell across several major segments. The Transport sector received 2,911 million euros in orders, a 36% decline attributed to several major contracts awarded in Western Europe during the first half of 2012/13,. The Grid sector recorded 1,671 million euros in orders, an organic decrease of 18% compared to the previous year, which had been marked by a significant HVDC contract in India,. Thermal Power orders fell 17% to 3,801 million euros.

Despite the drop in new orders, consolidated revenue rose 4% on a comparable basis to 9,730 million euros. Growth was supported by a 6% increase in Renewable Power, driven by Wind activity in Brazil, and a 5% increase for Grid on HVDC contracts. Thermal Power and Transport revenues grew 4% and 2% respectively. The company said unfavorable Euro exchange rates, particularly against the Brazilian real and Indian rupee, reduced revenue by 344 million euros.

Operating results remained steady. The operating result was 695 million euros, compared to 703 million euros in the first half of 2012/13. The operating margin shifted slightly to 7.1% from 7.2% in the prior year period. Net income attributable to the Group reached 375 million euros, a 3% decrease caused by higher restructuring charges and financial expenses.

The company maintained a backlog of 50.9 billion euros as of September 30, 2013, which represents 30 months of revenue. Currency depreciation in emerging markets, including the South African rand, Indian rupee, and Brazilian real, reduced the order book by 1.8 billion euros compared to March 31, 2013.

Alstom spent 390 million euros on research and development during the period. These investments included the development of the HALIADE 150 6 MW offshore wind turbine and the prototype of the ECO 122-2.7 MW onshore turbine. In the Thermal Power segment, the company expanded its gas turbine range in partnership with Rolls-Royce and planned an expansion of its testing center in Cologne, Germany.

Financial activity included a 500 million euro bond issue in July 2013 with a 3% annual coupon, maturing in July 2019. As of September 30, 2013, the company held 1,836 million euros in cash and cash equivalents and an unused credit line of 1.35 billion euros.