ABB India net declines 26 percent in 2012
Bangalore, Feb 21 : Power and automation technologies major ABB Ltd reported net profit of Rs.137 crore for calendar year 2012 as against Rs.185 crore in in 2011, registering a decline of 26 percent year-on-year (YoY).
In a regulatory filing Thursday, the India subsidiary of the Swiss global firm said revenue for the year under review (2012), however, remained flat, growing marginally 1.4 percent YoY to Rs.7,470 crore (Rs.75 billion) from Rs.7,370 crore (Rs.74 billion).
For fourth quarter (October-December) of its calendar fiscal (FY 2012), net profit slumped by a whopping 73 percent YoY to Rs.17 crore from Rs.64 crore in same period of 2011, while revenue declined 5.4 percent YoY to Rs.2,053 crore during the quarter under review (Q4) from Rs.2,170 crore in like period year ago.
"Delays in receipt of payments due to tight liquidity in the market, inflexible terms and conditions in infrastructure projects, forex volatility and low price realisation increased the risk level and impacted our project margins during the year," the company said in a statement here.
Though orders received for the year (2012) were valued at Rs.6,966 crore as against Rs.8,189 crore during 2011, the order backlog for this year (2013) is well positioned for the company at Rs.8,672 crore.
To overcome challenges arising out of weak investments in traditional markets, the subsidiary leveraged new business streams such as solar, data centres and energy efficiency solutions.
"We have also decided to reposition our power systems business for higher profitability by adopting a business model in line with the global strategy of having higher parent content in projects with appropriate risk return profile," the statement said.
Admitting that project businesses were affected by poor market conditions, tight liquidity and external factors, the company said product businesses and exports, however, grew in double digit with increased geographical reach during the calendar year.
"While short-term economic uncertainties cannot be ruled out, we are cautiously optimistic about the long-term potential of the Indian market. We look forward to the government's reform initiatives to accelerate and revive the capital goods sector," ABB India managing director Bazmi Husain said in the statement.
The company plans to introduce new technology and products to help Indian utility and industry customers remain competitive.
"We are also intensifying efforts to boost productivity, strengthen project management and optimise resource utilisation for sustained profitable growth," Husain added.
The company's board recommended a divided of Rs.3 per share (150 percent) to investors for full year.