September 07, 2008

ABB Q1 net income up by 87% YoY

Swiss engineering group ABB announced that its first quarter net income reached USD 1 billion, an increase of 87% YoY as global demand for more reliable power and improved industrial efficiency continued to grow and the company’s efforts to improve operational performance generated further benefits.

Earnings before interest and taxes reached a record USD 1.4 billion, up by 65% YoY. The EBIT margin increased to 17% from 13.2% in the first quarter of 2007. Approximately one percentage point of the EBIT margin in the first quarter resulted from gains on the mark to market treatment of hedging transactions. The gains were related mainly to the sharp decline in the value of the US dollar and increases in commodity prices during the quarter.

Orders, revenues and EBIT increased in all divisions as market demand remained robust in all regions. Utilities continued to invest in new and refurbished power infrastructure while industrial customers, especially in the metals, minerals and marine sectors, further expanded capacity on the back of high commodity prices. Industrial demand for more energy efficient technologies also continued to be a key growth driver.

Mr Michel Demaré CEO & CFO of ABB said that "ABB experienced a very good start in 2008 across all businesses and regions. Demand from utilities and most of our major industrial markets remained strong around the world, especially in emerging economies, but also in the US Customers continued to invest in areas where we are market and technology leaders power infrastructure, energy efficiency and productivity.”

He added that "These excellent results also reflect our continuing strong operational performance. Lower cost sourcing, footprint optimization, better project execution and risk management, and more efficient capacity utilization all contributed to our improved results."