Invensys finds gloom and resilience in process markets

London - Invensys found grounds for optimism despite a continuing deterioration in many of the industrial automation markets served by Invensys Operations Management - a newly formed division that integrates its Process Systems, Wonderware and Eurotherm businesses, the group said in a financial statement for the year ended 31 March 2009.  

"Although the product businesses within Process Systems and Eurotherm are likely to continue to experience ongoing declines, we expect that the creation of the integrated division will provide benefits in the current year. Overall we expect to make progress in the current year,"  added Invensys.

The Process Systems unit posted a 19% year-on-year increase in order intake to £1,187 million, including a number of longer-term orders. Orders grew in all regions and in addition there was improvement in the size of the pipeline of order prospects, said Invensys. However, revenues dipped 1% to £951 million and operating profit fell 20% to £108 million due to increased investment costs.

Despite the current global economic climate, many of Process Systems' major end markets, particularly in the oil & gas, refining and power sectors, have shown resilience, said Invensys. However, it also reported delays in the award of contracts for some greenfield projects due to retendering by main contractors seeking to benefit from reduced commodity prices.

The long-term nature of investment decisions within these sectors and the needs of customers to improve the efficiency of existing plants have meant that the impact upon our project business, said the group, though it also noted weakening demand and pricing pressure in the measurement and instrumentation product sector.

Regionally, Invensys noted continued strength in the Middle East and South American markets, driven by demand for systems and services from the oil & gas sector. In the North America market, it reported increased demand for upgrades and efficiency improvements.

Investment in new facilities in Asia Pacific was generally strong including the Chinese nuclear power generating market but there was a slowdown in demand within Europe and Africa, said Invensys. Business in the latter two regions was impacted delays on investment decisions caused by the weakening economy.

Markets for Eurotherm's control, data and measurement instrumentation products, particularly in Western Europe and North America, have been affected by the economic downturn, said Invensys. There was, it explained, a significant deterioration in consumer product-related markets during the second half of the year, as customers cut capital and maintenance spend in reaction to volume reductions in their businesses.

Orders at Eurotherm fell 13% to £116 million, while revenue was down 10% at £118 million. Operating profit was down 62% at £4 million due to mainly to the reduced revenue.