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ABB India declines after PAT slumps 80% Y-o-Y

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ABB India fell 4.46% to end at Rs 1,274.50 after consolidated net profit dropped 80.46% to Rs 38.66 crore in Q4 December 2019 (Q4 CY19) as against Rs 197.91 crore reported in Q4 December 2018 (Q4 CY18).

Total revenue from operations fell 0.66% year-on-year (Y-o-Y) to Rs 1,953.33 crore in Q4 CY19. The Q4 figures were announced during market hours today, 12 February 2020.

Profit before tax slumped 60.46% to Rs 79.96 crore Y-o-Y. Total tax expenses tumbled 79.21% to Rs 15.30 crore during the period under review.

The consolidated net profit tumbled 40.61% to Rs 303.40 crore on a 9.34% rise in total revenue from operations to Rs 7,315.06 crore in the year ended December 2019 over the year ended December 2018.

EBITA fell 41.71% to Rs 109 crore in Q4 CY19 from Rs 187 crore in Q4 CY18. EBITA margin stood at 5.6% in Q4 CY19 as against 9.5% in Q4 CY 18. The profit margin was at 3.4% in Q4 CY19 as compared to 6.5% in Q4 CY18.

During the quarter, the company recorded an exceptional impairment cost amounting to Rs 69.70 crore towards the re-measurement of solar inverter business's fixed assets and inventories at realizable values.

ABB India has approved the for sale of firm's solar inverter business and authorised the management of the company to take all required steps including appointment of advisors, valuers etc., and accordingly the management took required further steps in that regard.

The firm said that the quarter witnessed uptrend in revenues from projects for systems drives. Distribution solutions was a growth driver for revenue with improved execution. Robotics and discrete automation successfully steered applications to deployment in non-automotive sectors like consumer electronics and food and beverage.

The total orders dropped 15.95% to Rs 1,596 crore in Q4 CY19 over Rs 1,899 crore in Q4 CY18. The total orders rose 3.58% to Rs 6970 crore in the year ended December 2019 compared with total orders of Rs 6729 crore in the year ended December 2018.

The order backlog is at Rs 4123 crore, which provides revenue visibility in shorter business cycles and allows us to capitalize on market developments in the coming quarters.

"We have delivered another year of sustainable growth in 2019, carving out new opportunities while market volatility persists, said Sanjeev Sharma, managing director, ABB India. 2019 has been a year of transformation for ABB, which has been managed seamlessly while delivering value to stakeholders every quarter. Each of our businesses have over the years built a strong foundation to be able to with-stand any temporary headwinds whilst delivering operational and financial excellence. Balancing export with domestic focus, enhancing volumes with better pricing management and a keen eye on costs and cash helped drive performance during the year, he added. With stimulus driven growth likely to continue, we are well primed for next level growth opportunities from sectors like transportation, infra-structure -buildings, ports, electronics, water, F&B and logistics with tier 2 and 3 cities leading the way."

In its outlook, the company said that stimulus led growth with structural and economic reforms expected to pave way for growth pickup. ABB India will continue to watch market developments closely in the near term and be ready to capitalize on opportunities that may arise. By leveraging a solid foundation built over similar market conditions in the last few years, the company will pursue prospects, innovating and expanding to counter volatilities and headwinds in the short to medium term. On a longer-term basis, the structural growth drivers and stimulus measures are likely to usher in some stability for the wider economy subject to global easing.

During the quarter, ABB India received the NCLT approval and the Power Grids entity was successfully demerged from ABB India on 1 December 2019. The new entity ABB Power Products and Systems India (APPSIL) is now operational as a self-sufficient unit with minimal support from ABB India. Asset separation is currently in progress, the company said.

The board has recommended a dividend of Rs 4.80 per equity share for the year ended December 2019.

ABB India is engaged in power and automation business in India.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 12 2020. 17:24 IST