Switzerland based engineering giant ABB has posted full year results for 2005 showing earnings before interest and taxes of more than $1.7 billion and a net income of $735 million, compared to a $35 million loss in 2004.
“We have successfully moved into a phase of profitable organic growth,” said Fred Kindle, ABB president and chief executive, adding: “A strong second half of 2005 has given us a good basis now to enter 2006 and generate further profitable growth.”
Regionally, 2005 orders grew 19% in the Americas as a result of a recovery in demand for power systems and equipment, especially in the U.S., and as industrial growth continued in both North and South America. Orders in Asia increased 16%, reflecting the ongoing investments in power and industry infrastructure to support robust economic growth. In Europe, orders were flat in 2005 compared to 2004 with . modest growth in western Europe offset a decrease in eastern Europe. Orders from the Middle East and Africa increased 31%, driven largely by the growing need for products and systems to support expansion in the oil and gas sector.
The Power Technologies division reported a 64% increase in earnings in the fourth quarter, in spite of $43 million in charges related to the previously announced transformer consolidation programme.
In the power sector, utilities in Asia and the Middle East continued to support high levels of economic expansion with investments in power transmission and distribution infrastructure, ABB said. In Europe and the Americas, T&D investments were aimed mainly at replacing aging infrastructure and improving the performance and reliability of existing grids.
Orders in the Power Technologies unit grew 17% on 2004 figures with revenues 13% up. Higher revenues across the business reflect mainly higher order volumes with both large and base orders increasing. Orders were higher in Asia, with a strong increase in India more than offsetting lower orders in China. Earnings for the sector in increased by 30% compared to 2004. Cash flow from operations in 2005 amounted to $681 million, an increase of 37% from $498 million in 2004, primarily the result of higher earnings.