ABB H1 earnings hit by drop in big orders

ZURICH: Swiss-Swedish engineering giant ABB said that first-half net profits fell by around one fifth, weighed down by restructuring costs.

ABB said net profit dropped by 21 per cent to $906 million (821 million euros), on a six-per cent fall in sales due to fewer big orders.

The group, which produces items ranging from electrical transformers to ship propulsion parts, said that sales stood at $16.5 billion for the first six months of this year.

For the April to end-June period alone, large contracts fell 41 per cent, it said.

Smaller orders — below $15 million — were steady, but were down by 3 per cent when converted into dollars.

“Base order demand was strong in Germany, Spain, Sweden and Denmark, and weak in the UK amid uncertainties around Brexit,” ABB said in a statement.

ABB said utilities remained “cautious but continued to make selective investments to integrate renewable energy and enhance energy security”.

The company however won orders of more than $300 million in China for an ultra-high voltage power link.

“Automotive and consumer industries continued to drive demand,” ABB said. Looking ahead, the group sees a “mixed picture with continued uncertainty,” it said.

“Some macroeconomic signs in the US remain positive and growth in China is expected to continue, although at a slower pace than in 2015.