May 16, 2018 / 7:19 AM / in a year

UPDATE 1-French group Alstom posts higher sales and profits, shares surge

* Alstom shares rise sharply after results

* Alstom merging rail operations with Siemens

* Alstom raises dividend 40 pct to 0.35 euros (Adds share price, further detail)

By Cyril Altmeyer

PARIS, May 16 (Reuters) - French manufacturing group Alstom , which is merging its rail operations with Germany’s Siemens, reported higher annual sales and profits on Wednesday that sent its shares surging higher.

Alstom makes railway infrastructure products as well as other equipment and services for the transport sector.

Last year, Siemens and Alstom agreed to merge their rail operations, creating a European champion to challenge the advance of China’s state-owned CRRC.

Alstom’s sales for its 2017/2018 financial year rose by 9 percent from the previous year to 7.951 billion euros ($9.4 billion), while adjusted earnings before interest and tax (EBIT) climbed 22 percent to 514 million euros.

Alstom also proposed a dividend of 0.35 euros, up 40 percent from last year, while its EBIT margin rose to 6.5 percent from 5.8 percent.

Alstom shares were up 5 percent in early session trading, touching their highest level since July 2011.

Alstom said it expected sales of around 8 billion euros for next year, and an EBIT margin of up to 7 percent.

“Alstom continued to leverage the growing globalisation of the mobility market and is now in excellent position to join forces with Siemens Mobility,” said Alstom Chairman and Chief Executive Henri Poupart-Lafarge in a statement.

Poupart-Lafarge added that Alstom’s pipeline of orders was up from last year’s levels, and that the company hoped to return towards winning major contracts in the Middle East given a rebound in oil prices that boost the region’s economies.

$1 = 0.8450 euros Reporting by Cyril Altmeyer; Editing by Sudip Kar-Gupta

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