French engineering group Alstom has reported a 28% fall in net profits from €768 million in 2012/13 to €566 million in 2013/14. It attributed the fall to 'higher restructuring and financial charges,' along with specific write-offs and provisions.
Alstom booked €21.5 billion of orders in FY 2013/14, also down around 10% year-on-year. But sales were up 4% organically, driven mainly by the strong performance of Transport and Renewable Power, says Alstom.
Alstom says the strong commercial performance of the Renewable Power division was thanks to several hydro contracts booked in Albania, Turkey, Canada, India and Israel, as well as 'significant commercial successes' in wind, notably in Brazil.
The results come as Alstom considers a €12.35 billion offer from General Electric to acquire its energy business, which include the thermal power, renewable power and grid divisions. Together these divisions accounted for 70% of Alstom's orders in 2013/14. Thermal Power registered €9 billion of orders in 2013/14; Renewable Power, €2.6 billion and Grid €3.5 billion.
"Alstom received last week a binding offer from General Electric to acquire our Energy (Power and Grid) activities. The Group has retained the possibility to consider unsolicited alternative offers that may be deemed superior," said Patrick Kron Alstom's chairman and chief executive officer.
Should the project be approved and completed, Alstom says it would 'refocus' on its Transport activities, using the proceeds of the sale to strengthen its transport business, pay down debt and return cash to shareholders. The planned disposal of the minority stake in Alstom Transport, which was announced in November, is therefore currently on hold.
Last week the Alstom board endorsed the GE bid and announced that it has set up a committee of independent directors to review the proposed transaction before the end of May. The group also said it would review a bid from Siemens, should it become a binding offer.
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