“We have successfully moved into a phase of profitable organic growth,” said Fred Kindle, ABB CEO. He added: “Our market-leading positions led to a significant increase in orders and revenues, and further operational improvements contributed to a strong increase in earnings.”
He also said that the company met its original 2005 targets which, in view of the special charges throughout the year, was a solid achievement. A strong second half of 2005 has given it a good basis to generate further profitable growth.
The power technologies division reported a 64% earnings increase in the fourth quarter, in spite of $43m in charges related to the previously announced transformer consolidation programme. The automation technologies division increased earnings by 25% in the quarter, reflecting further operational improvements.
Said ABB: “Demand for power transmission and distribution infrastructure is expected to continue growing in Asia, the Middle East and the Americas. Equipment replacement and improved network efficiency and reliability are forecast to be the drivers of higher demand in Europe and North America.”
The company believes the US Energy Bill and European Union regional interconnection projects will have a positive impact – mainly in 2007 and beyond.
Automation growth, especially in the oil, marine and minerals sectors, is also expected to be strong.
If oil prices remain at current levels, ABB expects further investments to expand both production and refining activities, as well as the power infrastructure and marine shipping needed to support that expansion.
“Overall, automation-related demand growth is expected to be strongest in Asia and the Americas in 2006, with more modest growth in Europe,” ABB concluded.
