ABB, which came near to financial meltdown less than five years ago, rebounded strongly thanks to surging demand in its core areas of power technologies and automation. A settlement of asbestos claims against the group in the
Swiss engineering giant ABB showed signs of having turned the corner following years of financial difficulties.
Results in the fourth quarter revealed a turnaround from a $223m (£128m) loss a year ago to a $222m profit this time around. This was achieved despite a $72m shortfall derived from revaluing ABB shares reserved to cover part of the asbestos liabilities.
The strong financial performance included an increase in sales in the fourth quarter to $6bn, a seven per cent year-on-year increase in orders, and a reduction in its net debt to $500m in December from more than $1bn a year ago.
The Q4 performance helped propel the group to a net profit of $735m for 2005, despite a relatively weak end to the financial year in its European and American markets. This was in marked contrast to the performance in its Asian operations, where high levels of economic expansion with investments in power transmission and distribution infrastructure produced strong second half results. Orders in
The middle east and
Over the whole year the
This growth resulted in ABB’s two main divisions, Power Technologies and Automation Tech- nologies, registering an increase of 14 per cent in combined orders.
The hearing for ABB’s revised asbestos plan is imminent. A settlement of the asbestos issue would mark the final disappearance of a cloud that has hung over the group for years, allowing it to continue restructuring the business around its core power and automation operations.