Swiss engineering giant says third-quarter orders for 2016 fell to $7.53 billion, below industry estimates
ABB Group, the international infrastructure solutions provider, has said that its orders have slipped for a sixth quarter, with a host of external factors likely to impact performance for the foreseeable future.
In a statement, the group said that Brexit, the US elections and July’s attempted coup in Turkey had compounded hesitation amongst its customers in the Power Grid business.
The Swiss engineering giant explained that third-quarter orders fell by 14% to $7.53 billion. This lagged behind even the lowest of 17 estimates in a Reuters poll of analysts. The average numbers expected were $8.5 billion, the Reuters report said.
The last time a rise in orders were recorded in a year-on-year comparison was in early 2015.
The Zurich-based company reported a net profit of $568 million for the three months ended September 30, 2016. This was down from the $577 million reported a year earlier. However, the figure beat forecasts of $555 million in the poll.
Looking at demand in Asia, Middle East and Africa (AMEA), the company said that it had registered a mixed response.
“India continued to grow and China continued its investment activities in power transmission and robotics. Total orders for the region were down 7% as strong order development in India could not offset declines in China and the UAE. Base orders declined 10%,” a statement from the company said.
European demand was also dented by the Brexit decision, as well as ‘considerable investment delays’, which Ulrich Spiesshofer, ABB chief executive, said was down to the US presidential election.
“We face continued adverse market conditions. That will not go away quickly,” Spiesshofer said, speaking during a conference call with international media. “Brexit had a massive dampening effect.”
He added that he was unable to predict when ABB would return to growth, pointing out that it was likely to “take a while”.
ABB also said that orders in Power Grids, the company division that develops everything from microgrid equipment, through to big HVDC convertors, were hurt by the hesitation of customers in the months leading up to the October announcement that the company was keeping the division.