Alstom Orders More Than Double on South African Rail Contract While Sales Fall

France-based industrial equipment maker Alstom said its orders for the first quarter more than doubled primarily due to a massive train contract in South Africa.

For the quarter ended in June, the company booked €8.2bn (£6.5bn, $11.1bn) worth of orders, compared with €4.01bn last year.

"This record performance derives essentially from a contract with PRASA in South Africa booked in Transport for around €4bn, as well as a good flow of orders in Renewable Power and Grid," the company said in a statement.

The jumbo rail contract in South Africa includes 600 suburban trains and an 18-year maintenance contract.

Thermal power sector received €1.5bn of new orders, down 3% compared with the first quarter of the last fiscal year. Orders at renewable power and grid units rose 29% and 40%, respectively.

However, quarterly sales were organically down by 1% to €4.3bn, affected by the lower level of order intake in some businesses and negative foreign exchange impact.

Sales decreased 10% on a like-for-like basis in the first quarter in both thermal power and renewable power. Sales in grid fell by 5% on a like-for-like basis. Transport sales rose 17% organically.

Total backlog reached €56bn on 30 June, representing 33 months of sales.

The company's board earlier recommended a revised offer from General Electric to acquire its thermal power, renewable power and grid businesses, as well as corporate and shared services for €12.35bn.

"Concerning General Electric's offer for our Energy businesses, following the recommendation by the Board, we immediately initiated the first implementation stages, notably work councils' consultation – information, the finalisation of the JVs agreement and signalling acquisition, and launch of merger and other regulatory authorisation processes," CEO Patrick Kron said.

Alstom expects to call a shareholders' meeting before the end of 2014 to decide on the deal.

The company added that it is not in a position to give guidance for the current fiscal year due to the pending acquisition.

In 2014, it expects to achieve a good commercial performance at the transport business with sales to grow organically at a sustained pace.