Alstom, the French engineering company which is selling most of its energy-equipment business to General Electric (GE) to focus on train-making operations, said orders doubled in the fiscal first quarter because of a 4billion euro ($5.4billion) rail contract in South Africa.
Orders in the three months through June surged to $11billion, the company, based in Levallois-Perret near Paris, said in a statement.
Sales fell 4% from a year earlier to $5.8billion, hurt by the stronger euro. Analysts had forecast $6.1billion.
The growing train business is a boost for chief executive Patrick Kron, who decided to sell most of Alstom’s energy assets to GE for $16.6billion amid slowing demand for power plants in Europe and rising competition from Asian rivals.
The French company plans to use some of the proceeds to grow its rail division.
“First quarter orders made for a strong start of the year, thanks to transport which maintained a good commercial dynamic,” Kron said.
“In the energy businesses, thermal power had no large orders in new build, but benefited from a good commercial activity in service.
“Renewable power and grid orders had a solid start compared to last year.”
Alstom will reinvest $3.4billion from the GE deal to create joint ventures with the US company in the steam turbine, renewable energy and power-transmission businesses.
Alstom will also buy GE’s rail-signaling operations for about $808million.
“We expect transport to achieve a good commercial performance this year with sales to grow organically at a sustained pace,” Kron said.
He also said he expects a shareholder meeting to decide on the GE deal this year.
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