Engineering company ABB disappointed investors on Thursday as its fourth quarter net profit fell by 73.8 percent year-on-year to Rs 16.8 crore, sending shares to new 52-week low of Rs 587.
Engineering company ABB disappointed investors on Thursday by posting 73.8 percent year-on-year decline in December quarter profit to Rs 16.8 crore, sending shares to new 52-week low of Rs 587.
Net sales went down by 5.4 percent to Rs 2,052.8 crore from Rs 2,169.6 crore during the same period. Other income fell quite sharply to Rs 2.8 crore from Rs 27 crore YoY.
"Our products businesses delivered improved profitability. However, project businesses faced several challenges due to anticipated cost overrun mainly caused by project delays on account of external factors," ABB explained.
The company also disheartened by its operating performance. Earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 14.4 percent YoY to Rs 66.6 crore in the quarter ending December 2012.
EBITDA margin dropped 40 basis points year-on-year to 3.2 percent in the fourth quarter.
Finance cost for the company increased from Rs 12.92 crore to Rs 18.47 crore during the same period while tax expenses halved to Rs 9.58 crore from Rs 19.90 crore.
Its power systems division posted EBIT loss of Rs 62.92 crore in December quarter, rising significantly compared to a loss of Rs 1.37 crore in a year ago period and Rs 8.32 crore in previous quarter.
Revenues from its power systems, power products, process automation and discrete automation & motion segments declined while revenues from low voltage products division increased during the quarter.
While explaining the reason behind fall in margin for the year, the company said, "Delays in receipt of payments due to tight liquidity in the market, inflexible terms and conditions in infrastructure projects, forex volatility and low price realisation increased the risk level significantly and impacted project margins during the year."
The company received orders worth Rs 6,966 crore in the year 2012, down 15 percent compared to Rs 8,189 crore in previous year. Orders declined to Rs 1,579 crore in the quarter ending December 2012 from Rs 2,209 crore in the corresponding quarter of last fiscal.
ABB recommended a dividend of Rs 3 per equity share of face value of Rs 2 each for the year ended on December 31, 2012.
At 14:08 hours IST, shares plunged 3 percent to Rs 592.55 amid heavy volumes on Bombay Stock Exchange.
Trading volumes jumped 16 times to 76,623 equity shares as against five-day average of 4,761 shares.