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ALSTOM first half results 2004

13/11/2003

First Half Results impacted by uncertainties over ALSTOM's situation

  • Orders received: € 7.4bn, down 23% on a comparable basis
  • Sales: € 8.9bn, down 9% on a comparable basis
  • Operating margin: 1.5%
  • Net income: € (624)m
  • Free cash flow: € (674)m
  • Economic debt reduced to € 4.5bn

Progress on action plan

  •  € 2.5 bn proceeds from disposals secured
  • Financing package announced 22 September to strengthen the Group's financial structure, with positive feedback from customers
  • Significant progress made on GT24/GT26 gas turbines issue
  • Operational performance: restructuring accelerated with cost-reduction programmes underway


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Commenting on the results Patrick Kron, Chairman & Chief Executive Officer, said:

'ALSTOM's results for the first half of fiscal year 2004, though unsatisfactory, are generally in line with previous guidance.

Our low level of order intake mainly reflects weak demand for new power equipment, the impact of customer concerns surrounding ALSTOM's past financial position and difficulties experienced during the period in obtaining contract bonds. Our income was hit by additional charges on some US contracts and a significant increase in financial and restructuring charges.

The financing package announced on 22 September 2003 is designed to strengthen substantially the Group's financial structure and we are now seeing positive reactions from customers, as illustrated by € 700 million in orders having been secured in October by our Transport Sector. Despite difficult circumstances, we managed during the first half to win good orders such as trams and metros in Europe, gas turbines in Algeria, a combined cycle plant in Bahrain, Power service in the US and Brazil and a major utility boiler in China.

We also made significant progress on the action plan announced last March designed to improve Group profitability and cash generation, to close out past operational issues and reduce our level of debt. To date we have secured € 2.5 bn proceeds from disposals, including our small and medium-sized industrial turbines and our transmission & distribution activities; we continue to make encouraging headway on the GT24/GT26 issue, while major restructuring and cost-reduction programmes are underway worldwide to drastically cut our cost base.

My priority, and that of ALSTOM's management team, remains the continued full implementation of this action plan. The September financing agreement will be submitted for approval at a Shareholders' Meeting on 18 November and will be fully implemented as soon as possible thereafter. It will substantially increase our equity base through a capital increase and issue of bonds redeemable in shares, while providing the Group with adequate medium to long-term financing and on-going liquidity and contract bonding coverage. I believe the financing agreement is also a strong signal to the market that ALSTOM is back in normal business, not only with a commitment to meeting its operational improvement objectives, but above all its customers' needs and expectations.'


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A summary of ALSTOM s MD&A for the six-month period is attached. A full copy of this document, which takes precedence over this press release, is available on ALSTOM's website, together with a full set of accounts and notes ( www.alstom.com).


Press relations:
S. Gagneraud / G. Tourvieille
(Tél. +33 1 47 55 25 87)
internet.press@chq.alstom.com

Investor relations:
E. Chatelain
(Tél. +33 1 47 55 25 33)
Investor.relations@chq.alstom.com

M Communications:
L. Tingström
Tel. + 44 789 906 6995

The full press release, including summary of the MD & A is attached below:-