ABB India, a supplier of power and automation technologies, has suffered a sharp drop in its fourth quarter net profit to Rs 17 crore for the fourth quarter of calendar year 2012, as compared to a net profit of Rs 64 crore during the correponding period last year. Revenues too dropped by close to 29 per cent to Rs 1,579 crore. The net profit margin shrunk to 0.8 per cent from the earlier 2.9 per cent.
The company has said that its project businesses faced several challenges due to anticipated cost overrun mainly caused by project delays on account of external factors. "Delays in receipt of payments due to tight liquidity in the market, inflexible terms & conditions in infrastructure projects, forex volatility and low-price realisation increased the risk level significantly and impacted project margins during the year," ABB India explained weak numbers. The inflow of orders also weakend by close to 6 per cent at Rs 2,053 crore.
Bazmi Hussain, MD, ABB India said that while short-term economic uncertainties cannot be ruled out, they are cautiously optimistic about the long-term potential of the Indian market. "We look forward to Government's reform initiatives to accelerate and revive the capital goods sector. We are also intensifying our efforts to boost productivity, strenghten project management and optimise resource utilisation for sustained profitable growth," Hussain added.
On a full calendar-year basis, ABB reported a 26 per cent drop in net profit to Rs 137 crore on revenues of Rs 7,470 crore, which inched up by hardly a percent. The total order inflow dropped by 15 per cent to Rs 6,966 crore. ABB said that cumulatively they have an order backlog of Rs 8,672 crore, which can provide necessary visibility to future revenues.
ABB India's stock lost 3 per cent by noon trade and was trading at Rs 592 a share on BSE.
