Alcatel Alsthom To Sell Cegelec

Alcatel Alsthom said on Thursday that it expected continued earnings growth in 1998, independent of structural changes planned such as the sale of the Cegelec unit and the GEC Alsthom float.

Confirming a 1997 net income of 4.7 billion francs ($767 million) against 2.7 billion francs in 1996, on sales of 185.9 billion vs 162.1 billion, Alcatel raised its dividend by 15 per cent to a net 11.50 francs per share.

It said in a statement it foresaw the sale of most of its engineering and systems activities to GEC Alsthom the joint venture with GEC Plc.

These businesses represent sales of 25 billion francs, and include Cegelec as well as most of Siette in Italy.

The sectors telecom activities Alco, CGA-Transport and satellite telemetry, will be transferred to the telecom sector, and Sogelerg-Sogreah to a Thomson-CSF controlled entity.

Alcatel said that a planned alliance with Thomson-CSF in defence electronics contributes to the reshaping of Alcatel, in particular the creation of a worldwide business in communication satellites.

Alcatel Alsthom will pursue in 1998 the actions necessary to further improve its profitability. These actions will be oriented toward productivity gains and growth, and will benefit from the strong development of data traffic and mobile communications, the company said.

It said it intended to further build out its transmissions business which includes subscriber access, submarine networks and satellites.