ABB Power Systems woes go on
Power technology group ABB reported a strong growth in orders in the second quarter of the year, but net profit fell 17% to $636m due to continuing problems at its loss-making Power Systems unit.
ABB reported $10.2bn in revenues for the April-June period, in line with the same stage in 2013, but $1.3bn in earnings before interest, tax, depreciation and amortisation (Ebitda) – a 15% decrease compared to last year.
The Swiss group says the losses were related to ongoing charges in large engineering, procurement and construction (EPC) projects for offshore wind and solar within the Power Systems division.
"The loss was bigger than expected, but we are taking decisive actions to correct the situation," says ABB CEO Ulrich Spiesshofer.
According to ABB's new management, the group is implementing a new business model for offshore wind EPC and exiting the solar EPC business.
Orders were up by 14% to $10.6bn compared to the same period last year, with roughly half attributable to large orders, including a $400m deal to supply a power transmission link in eastern Canada.
Orders increased in Russia, the Netherlands and Germany, but declined in Norway, the UK and France, says the group.
However, adds Spiesshofer, the biggest growth in the second quarter was in ABB's two largest markets, the US and China.