Alstom swings to loss on US fine, Russian write-offs

Alstom CEO on US fine

A U.S. fine for bribery and write-offs on Russian assets pushed France's Alstom to a 719 million euro ($808 million) annual net loss, a big swing from a 556 million profit in the previous year.

The French transport and power firm said in December it would pay a record $772 million fine and plead guilty to settle U.S. criminal charges that it funneled millions of dollars in bribes to win business around the globe.

The company's income from operations in the year to the end of March rose 19 percent to 318 million euros and sales increased 8 percent to 6.2 billion, Alstom said on Wednesday.

The company said it would propose no dividend payout at its annual shareholder meeting but confirmed its medium-term earnings targets.

Alstom wind turbine.
Source: Alstom

Analysts had expected sales of 6.3 billion and an operating profit of 247 million euros and the company's shares rose 2.2 percent to 28.40 euros by 0720 GMT.

Alstom is reshaping by selling its power equipment business to General Electric (GE).

Alstom Chief Executive Patrick Kron said on a conference call that he expected the GE deal to close in coming months.

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General Electric's CEO Jeff Immelt met Europe's antitrust chief Margrethe Vestager this week to push for unconditional EU approval for GE's 12.4-billion-euro ($13.8 billion) bid.

"Post-deal the environment will remain very competitive," Kron said.

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Once the deal is closed, Alstom will call a shareholder meeting to vote on the amount of cash to be distributed, he said. He reiterated the company would propose a share buyback of 3.5 to 4 billion euros.

Kron said the funds from the GE deal would reduce debt and allow new investments but that organic growth would remain the priority.

"However we would consider any opportunities for external growth in order to complete our product range or boost or geographical reach," he said.

Alstom said it registered a record 10 billion euros in order intake in 2014/15, up more than 60 percent, thanks to a number of large deals, including a rail contract in South Africa, tramway systems in Qatar and Australia, trains for the Paris metro and a full metro system in Mexico.

Net income from continued operations was hit by a number of exceptional items, including a 720 million euro provision for the U.S. fine, 90 million in asset write-offs in Russia and restructuring charges of about 100 million, Alstom said.