ABB profits slump in first quarter
Weak demand for construction hurts the Swedish-Swiss engineering giant.ZURICH - Swedish-Swiss engineering giant ABB on Thursday said its net profit fell 35 percent during the first three months of 2009, and it remained unclear when a turnaround may come.
"Visibility in ABB's markets for the remainder of 2009 remains limited," said the group in a statement, noting that net profit fell to USD 652 million (EUR 500 million, CHF 760 million) in the first quarter.
"The cost and scarcity of project funding have delayed many power investment decisions, and ABB is unable to precisely forecast when the various government stimulus programmes will have an impact or when the availability of funding will improve," it said.
Orders received in the first quarter fell 3.0 percent in local currencies, but when converted into US dollars, it reflected a 17 percent drop.
Orders received from the Middle East and Africa helped to limit the reduced orders in local currency terms.
However, weak demand in the construction industry hurt the group.
"Demand for ABB's industrial products and systems deteriorated in the quarter as global industrial production continued to contract and demand in the construction industry decreased further," said ABB.
While demand for power infrastructure remained steady during the period, the group said limited funds for large power projects and uncertainty over raw material prices delayed new projects.
The group in February said its annual profit fell 17 percent to USD 3.12 billion in 2008, after a steep drop in orders from emerging markets in the fourth quarter.
AFP / Expatica