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ABB profit rise falls short of expectations

Swedish-Swiss engineering giant ABB on Wednesday reported a 41 percent increase in first quarter net profit, driven by strong demand from industry and power utilities.

Net profit reached $655 million during the first three months of the year while revenues registered their strongest quarterly growth in two years with an increase of 21 percent to $8.4 billion, the group said in a statement.

According to a survey carried out by Reuters, analysts had expected ABB to post profits of $687 million.

Orders grew by 28 percent across all of the engineering group’s divisions.

“Our results show we’re gaining traction in both growth and profitability,” said chief executive Joe Hogan, predicting “continued strong demand.”

“ABB’s long-term key growth drivers remain intact-the increasing need for energy efficiency, industrial productivity and more reliable power infrastructure in both the mature and emerging economies,” he added.

ABB experienced a 12 percent drop in annual net profit last year to $2.56 billion, announcing large cost cutting but forecasting that emerging markets would drive growth through 2011.

Earlier in the month, the company announced it had won a $120 million order from China’s State Grid Corporation (SGCC) for an ultra high voltage electricity line.

In March, ABB landed a $900 million order from Power Grid Corporation of India Ltd. (PGCIL) to deliver an ultrahigh-voltage transmission system in Agra, India.

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CHINA

Sweden’s Volvo Cars may merge with Chinese owner Geely

Sweden's Volvo Cars and its Chinese owner Geely announced on Monday that they are considering merging into a single group in order to share resources, but would preserve their separate brands.

Sweden's Volvo Cars may merge with Chinese owner Geely
File photo of a Volvo test-drive. Photo: Christine Olsson / TT

The merged firm “would have the scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry,” they said in a statement.

“The combination would preserve the distinct identity of each of the brands Volvo, Geely, Lynk & Co and Polestar,” they added.

Geely bought Volvo in 2010 from Ford which hadn't been able to turn around the Swedish automaker. But under the Chinese firm Volvo has rebounded and smashed its sales records.

Volvo sold more than 705,000 vehicles in 2019, besting the record it set in 2018 by 10 percent, and the automaker expects continued growth this year.

The statement said the firms would create a joint working group to prepare a proposal for the boards of both firms.

“A combined company would have access to the global capital market through Hong Kong and with the intention to subsequently list in Stockholm as well,” it added.

Volvo put off a share listing in 2018 due to tensions in global markets.

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