“Customers are waiting,” Alstom’s Head of Project Execution in Germany for the plant unit Frank Ennenbach said. “They’re observing pricing developments and expecting prices to decline.”
Customers such as independent power producers were having more difficulty getting financing for projects, pushing down demand, Ennenbach said. This makes customers anticipate lower prices as plant builders compete for fewer contracts.
Figures in the fiscal year starting April 1, 2009 will be more modest at the plant division, with profit margins coming under pressure, Ennenbach said.
Alstom had said in January 2009 that it had a 32-month backlog and had won contracts for gas turbines in the Netherlands, Spain and Armenia as well as a EUR500 million hydro project to equip a Brazil plant.
Alstom expects future growth from new energy plants in Asia and the upgrading of older facilities in Europe. More than half of European power plants were at least 30 years old and need to be renewed, Ennenbach said.
Alstom aims to serve the Chinese market from China and is building up employee numbers there, Ennenbach said. In September 2007, Alstom bought a controlling stake in Wuhan Boiler Company Limited to tap a growing market for coal-fired plants.
Alstom in January 2009 reiterated its forecast for operating profit equal to 9% of sales by March 2010. It predicted a 10% to 11% margin at its power systems and service units and 7% to 8% in transport.
