ABB posts major earnings rise

Zurich, Switzerland -- ABB Group has posted a 67% rise in earnings (EBIT) to $1,742 million, on 2005 sales of $22,442 million -- 9% higher than the prior-year figure . The group linked its higher earnings in part to previous cost-cutting initiatives, higher capacity utilisations and better project execution.

The positive performance was reflected in the UK, where ABB grew its share of key markets and was also buoyed by repeat business, a company spokesman said. Overall, UK markets remained about on par with 2004 sales levels, he indicated.

Indeed, ABB reported that orders were flat Europe-wide last year. By contrast, orders in the Americas grew 19% on recovering demand for power systems and equipment and continued industrial growth. In Asia, meanwhile, orders rose 16% amid ongoing investments in power and industry infrastructure.

Since the start of 2006, Zurich-headquartered ABB comprises five core divisions; Automation Products, Automation Systems, Power Products, Power Systems and Robotics. The group formerly operated just two core divisions; Automation Technologies and Power Technologies, which posted 2005 sales of $12,161 million (up 11%) and $9784 million (up 13%), respectively.

FOr 2006, Fred Kindle, ABB chief executive officer, forecast demand for power transmission and distribution infrastructure to continue growing in Asia, the Middle East and the Americas. Equipment replacement and improved network efficiency and reliability should lead, meanwhile, generate higher demand in Europe and North America, he said.

ABB expects automation-related investment to be particularly buoyant in the metals and minerals, marine and oil & gas sectors. High oil prices should also fuel a further expansion in production and refining activities, Kindle added in a 16 Feb results statement.

The group, however, forecasts only modest growth in automation-related Europe in 2006, compared to much stronger growth in Asia and the Americas, the CEO stated.