Turbo-charged recovery

20 February 2004

The French engineer appears to have turned around the business that nearly bankrupted it. The broader question is whether the leopard has changed its spots. Alstom’s balance sheet cannot withstand another accident.

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Shares in Alstom, the French engineer, have risen by more than 70% in the year to date.

The group last month reported orders for the three months to December 31 had increased by 32% on the previous quarter and by 11% on the same quarter the year before, on a comparable basis.

Among the orders was a E430m power contract to install GT26 gas turbines at Gas Natural in Spain. This was the first order received since 2000 for the turbines, which suffered faults that led to compensation payments that nearly bankrupted Alstom. The group has also received various orders from the French national railways.

The European Commission is expected to conclude in April a review of Alstom's statesponsored refinancing, which completed in January. Commissioner Mario Monti is investigating the impact of the transaction on competition.

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