Posting higher Q3 orders, EBIT and cash flow, ABB announces program to strengthen capital
November 2003
News
Zurich, Switzerland, 28 October, 2003. ABB's core divisions, Power Technologies and Automation Technologies, today reported another quarter of improved results, with double-digit growth in orders and earnings before interest and taxes (EBIT), plus higher revenues and operating cash flow.
ABB again successfully lowered costs and increased margins. Operational improvements, together with divestment gains, lifted the Group's EBIT for the quarter to US$ 262 million, an increase of US$ 348 million compared to the same period of 2002. A number of mainly non-cash losses in discontinued operations led to a net loss of US$ 279 million.
ABB also said today it had signed a preliminary agreement to sell the upstream business in its Oil, Gas and Petrochemicals division to a consortium of equity investors.
On the back of these developments, ABB announced a broad program to strengthen its capital and financing structure. The program comprises a proposal to issue new shares worth the equivalent of approximately US$ 2,5 billion, a newly agreed US$ 1 billion bank credit facility and the launch of a new bond.
"The good performance of our core divisions and the preliminary agreement to sell our upstream business are key milestones on the road to sustainable success," said Jürgen Dormann, ABB chairman and CEO. "The time has come to take another decisive step, and that is why we have announced a financial restructuring program designed to strengthen our balance sheet."
Dormann said the company maintains its 2005 revenue growth, EBIT margin and debt targets, but that it has revised the 2003 local currency revenue growth targets for the core divisions.
"Our operational profitability continues to improve and, thanks to successes at reducing costs, we are in a good position to tap global economic growth when it returns," Dormann said. "We have picked up profitable market share in many areas, and the net Group loss in this quarter is due to mainly non-cash losses in businesses that we are divesting."
More information
The 2003 Q3 results press release and presentation slides are available from 28 October, 2003 on the ABB News Center at www.abb.com/news and on the Investor Relations homepage at www.abb.com/investorrelations.
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