ABB Group reported yesterday that its fourth-quarter 2013 results were adversely impacted mainly by charges for storm-related project delays and some operational issues in the Power Systems (PS) division. Additional restructuring-related charges were taken in response to the division’s soft order intake in 2013. The company also booked non-operational charges related to certain Group legacy issues.
"While the performance of four divisions was in line with our expectations during the fourth quarter, the issues we face in Power Systems are disappointing. This means we will not be able to deliver our profitability target for the division in the quarter. A focused action program is addressing these issues and implementation has been started swiftly," said Ulrich Spiesshofer, Chief Executive Officer of ABB. "With Claudio Facchin we have a leader at the helm of PS who brings global systems experience to drive the business towards an improved performance. The division's new leadership is assessing the progress and targets of the realignment and we expect to provide an update when we announce the fourth-quarter and full-year results," Spiesshofer added.
PS operational EBITDA was impacted by approximately $260 million in charges resulting mainly from delays to offshore wind projects caused by severe winter storms in the North Sea in December and some operational issues which are being addressed with the enhanced realignment program. Storms like this slow down installation processes and operations, which has costly knock-on impacts and delays on related activities and time schedules.
Net income was impacted by the PS situation outlined above and some non-operational items. These non-operational items included approximately $50 million for additional restructuring-related charges in response to the soft 2013 order intake in PS, as well as charges for some Group legacy issues. Fourth-quarter basic EPS is expected to be approximately $0.23.
The company expects free cash flow for the full-year 2013 to be approximately in line with 2012 despite the negative cash flow from operations in PS. All figures are preliminary and unaudited. ABB will announce its fourth-quarter and full-year results on February 13, 2014.