ABB Limited, India Announces Its Fourth Quarter And Year-End Results For 2010

Revenue up by 9% in Q4. Order backlog continues to be strong. Dividend 100% in a challenging year. Company continues to be debt free. End Quote

(1888PressRelease) February 24, 2011 - Key figures:
Q4, 2010 Q4, 2009 12 mths ended 2010 12 mths ended 2009
Orders 13,942 23,766 63,496 86,847
Order backlog (at end of period) 84,362 84,787
Revenue 20,506 18,852 62,871 62,372
Profit before tax 156 1,576 1,002 5,274
Profit after tax 68 1,096 632 3,546

Figures in Rs. million unless stated otherwise

Orders

The company received orders worth 13,942 MINR during the quarter ended December 31, 2010, compared with an order intake of 23,766 MINR for the same period last year. The order performance of the company was impacted during the year by price erosion and increased competition mainly in the power sector while the automation businesses remained stable. The orders received were further impacted by de-logging of some orders for projects, which were indefinitely postponed for various external reasons.

With increased investments expected in the infrastructure and industry sectors, the company anticipates continued growth in the market. Better market conditions combined with management actions underway to increase competitiveness, the company presumes that the order situation will improve in the coming quarters.

Order backlog

The company's order backlog stood at 84,362 MINR as of the end of December 2010 as against 84,787 MINR at the end of December 2009. With this strong order backlog, the revenues of the company for the coming quarters are secured.

Revenue and operations

The revenue for the fourth quarter ending December 2010 was 20,506 MINR compared to 18,852 MINR showing a growth of 9% over the same quarter last year. Supported by a strong backlog, the combined revenues for the power businesses witnessed double digit growth while the automation businesses grew moderately.

The company continued to remain debt free in this quarter as well, with its focussed initiatives on working capital management and generation of adequate cash from operating activities.

Keeping a long term view and renewed confidence in the potential of the Indian economy, the company has taken multiple measures during the past year to augment and train its skilled resource base including induction of specialists and expert resources mainly in the areas of business development, sales, project management and engineering. The impact of increased investment in this area will be offset by the productivity gains anticipated in the coming quarters.

Net profit

The company posted a PBT of 156 MINR for the quarter ended December 2010 against 1,576 MINR in the same quarter last year. The results were adversely impacted due to provisioning for expected incremental early exit costs for all the balance projects, pertaining to the non-core businesses, which the company had decided to exit in the earlier quarters.

The loss on account of fair valuation of foreign exchange forward contracts for firm trade commitments and embedded derivative contracts also impacted the results.

Dividend

Keeping in view the stable financial condition of the company and confidence in the future business performance, the Board of Directors recommended a dividend of 100 percent, subject to the approval of shareholders at the forthcoming Annual General Meeting.

"The ABB Group has a long term view and confidence in the potential of the Indian economy. The Group increased its investment in India by 965 MUSD in last year's open offer and continues to focus on new initiatives for the future benefit of the company," said Bazmi Husain, the recently appointed Country Manager and Managing Director of ABB Ltd."By increasing the indigenization of our product lines and our competence in R&D, we will be well placed to offer more cost efficient and value-added solutions for our customers. Ensuring the highest standard of operational excellence and consistent investment in developing competence of our people will remain our key priorities."

ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 124,000 people.

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