ABB India: Solid all-round double-digit growth
Deepthi | Myequity news | Date : 01-03-2019 16:15:00 IST
ABB India Limited fourth quarter (Oct – Dec) and full year CY2018 results
-Strong quarter with revenue up 15 percent YoY on swift order backlog conversion
-Orders grew 17 percent across products and services
-Milestone orders for ABB Ability™ in process industries
-Operating EBITA increased by 37 percent YoY
-ABB Group announced the focus of portfolio on digital industries through divestment of Power Grids
-Total orders grew by 16 percent YoY, led by infrastructure, transportation and urbanization
-2018 witnessed successes with ABB Ability™ digital offerings for customers in Indian cement, steel and tyre industries
-Revenue up 10 percent YoY on focused portfolio offerings and digital leadership of ABB Ability™
-Operational EBITA increased by 12 percent YoY
-Consistent growth in profit after tax by 13 percent YoY
-Board recommends full-year dividend of 240%
Shaping a future focused on digital industries
On December 17, 2018, ABB announced fundamental actions to focus, simplify and lead in digital indus- tries for enhanced customer value and shareholder returns. These actions are: focusing the portfolio on digital industries through divestment of the Power Grids division, the simplification of the business model and structure and the shaping of four leading businesses aligned with customer patterns.
-Focus of portfolio on digital industries through divestment of Power Grids (PG) to Hitachi, which expands the existing partnership and strengthens Power Grids as a global infrastructure leader
-Simplification of ABB’s business model and structure: Implementation of a new operating model that will provide each business with full operational ownership of products, functions, R&D and territories.
-Shaping four leading businesses aligned with customer patterns. All businesses are global #1 or #2 businesses in attractive growth markets with strong drivers: Electrification, Industrial Automation, Motion and Robotics & Discrete Automation.
Total orders in the fourth quarter of CY2018 grew 17 percent YoY to INR 1900 crore across products and services. Full year 2018 witnessed 10 percent YOY growth in base orders, with total orders up 16 percent YOY to INR 6,729 crore.
The company’s pioneering technology leadership in digital industries with ABB Ability™ offerings was a major catalyst in the quarter and during the year. Highlights include the first order of its kind for ABB Ability MyRemoteCare digital solution, used in remote monitoring of medium voltage power distribution for reliability, while minimizing downtime in the manufacturing processes for the largest tyre manufacturer in the country. During the quarter, a service order was won for ABB OPTIMAX®, which is a part of the Ability Energy Management portfolio, for a large energy-intensive cement company to reduce energy costs and site emissions. Additionally, orders were received to develop special software for barge movement for steel handling at port and for tracking, scheduling and thermal modelling of ladles in steel melting shops for one of the largest steel companies in Asia.
Transportation continued to be a focus area with orders received for customized ABB traction solutions and propulsion systems for new-age electric locos made in India during the quarter. ABB’s traction solution is based on the latest technology to bring more reliable trains to passengers, while increasing sustainable transport use by moving from diesel trains to electric. This helps rail companies achieve significant operational efficiencies.
A few examples of widening scope of ABB applications in 2018 include robotics orders for food and beverage packaging, drives for temperature control in buildings and metros, as well as instrumentation and electrification solutions for water distribution for smart cities.
The order backlog as of December 31, 2018 stands at INR 4227 crore, an increase by 10 percent YoY, and reflects the strong drivers of the economy and provides support to future revenue development.
Revenue and operations
Revenue for the fourth quarter stood at INR 1,966 crore, up 15 percent year on year. For the year 2018, ABB India’s revenue grew to INR 6,690 crore, up 10 percent YoY on successful execution of the order backlog. Commissioning milestones include the compact power distribution substations for the landmark infrastructure project Bogibeel bridge in the north east, technology solutions for temperature control at the world’s tallest Statue of Unity and the electrification of the country’s first inland waterway container handling terminal on the River Ganga. Buoyed by the government push in infrastructure, ABB’s 24x7 power distribution technology helped light up cricket and hockey stadiums in Lucknow and Bhubaneshwar.
During the year, ABB opened two smart factories in Nashik and Bengaluru for power distribution products. State of the art IE4 motors were launched during the year for the first time in the country. Expanding its offering in the food and beverage sector, ABB commissioned the first of its kind motors and drives for re-oxygenation in a large aquaculture project in the country. Profit
The Company reported a Profit before tax (PBT) of INR 202 crore and profit after tax (PAT) of INR 129 crore during the fourth quarter on improving operating performance. For the full year 2018, PBT rose by 18 percent YoY to INR 395 crore. The PAT for the year was INR 254crore, an increase of 13 percent YoY.
The Board of Directors has recommended a dividend of Rs 4.8 per share (240 percent), subject to the approval of shareholders at the forthcoming Annual General Meeting.