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Alcatel Lucent cuts net loss, reports success with 'Shift Plan 2015'

Alcatel-Lucent cuts net loss, reports success with 'Shift Plan 2015'

By Agence France-Presse | Updated: 6 February 2014 16:58 IST

Alcatel-Lucent, a leading global supplier of telecom equipment for the Internet, said Thursday it had slashed its net losses by a third last year, sending its shares by nearly nine percent.

The telecom company also said that as part of restructuring, it would sell its subsidiary Enterprise to a Chinese firm.

The group, refocusing its business under a new chief executive after years of post-merger trauma, cut its net loss last year by about a third to 1.3 billion euros ($1.76 billion).

The company, concentrating on advanced Internet equipment, said that it had steadied sales figures at 14.4 billion euros at constant exchange rates.

The loss reflected mainly asset write-downs of 548 million euros, and restructuring charges as well as debt interest.

The price of shares in the group, which has been hit for several years by periods of deep job cutting and losses, surged by 8.95 percent to 3.30 euros.

The overall French market as measured by the C AC 40 index, was showing a gain of 0.36 percent.

Traders said that investors were impressed by the reduction of the net loss.

The group also reported an adjusted operating profit of 290 million euros, and improvement of 530 million euros from the outcome in 2012.

The adjusted operating figure is important for a company because it shows how it is performing in its essential business of turning inputs into products, and making a margin out of which to meet all other charges.

Alcatel-Lucent said that it would sell its subsidiary Enterprise for 268 million euros to technology investment firm China Huaxin.

This company is a long-standing partner since it is a minority shareholder in another subsidiary in China called Alcatel Shanghai Bell.

The group, which has struggled against fierce competition from China in its traditional sectors, has launched a restructuring programme called "The Shift Plan 2015".

The company said that it was repositioning its business "as a specialist of IP (Internet protocol) and Cloud networking, ultra broadband fixed and mobile access" and had raised margins and gained market share.

Managing director Michel Combes told a telephone press conference that the company had been successful with its Shift Plan.

It had made savings in fixed costs of 363 million euros last year, of which 104 million had been achieved in the last quarter, far above the target for the year of 250-300 million euros.

The group had net cash available of 149 million euros at the end of 2013, following an operation raising 1.0 billion euros of capital during the year and a rescheduling of debt.

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