Swiss engineering group ABB Ltd yesterday said profits of all its businesses would suffer in the first quarter, because of the fallout from the coronavirus and due to plunging oil prices.
The maker of industrial robots, factory drives and chargers for electric cars ditched its financial guidance for the year.
“Although it is not yet possible to determine the exact impact of COVID-19 on ABB’s first-quarter results, ABB expects revenues to decline in all its businesses relative to a year ago, while orders are somewhat less impacted,” it said.
Profitability would also decline as it struggled with lower production volumes, the company said.
ABB said it expected its Robotics & Discrete Automation business, which was already facing lower demand from the automotive sector, to have 20 percent fewer orders and sales during its first quarter compared with a year earlier.
The company said it had applied for the short-time working scheme at some plants in Switzerland, where the government helps pay the wages of staff who are not working full time.
The company, which employs 144,000 people globally, has not made any job cuts so far as a direct result of the COVID-19 pandemic.
“ABB continues to monitor the situation around COVID-19 and its impact on the company to be able to take further appropriate action as necessary,” a spokesman said.
ABB last month said it expected weaker growth in Europe and the US, adding that China — its second-biggest market with 15 percent of its sales — might be impacted by the virus outbreak.
Since then, the company said trading conditions had declined, hit by the weakening oil price which reduces the ability of customers to pay for new investments.
ABB’s board of directors and executive committee had decided to take a voluntary 10 percent pay cut for the duration of the crisis, with the money going toward efforts to fighting the virus, chief executive Bjorn Rosengren said.
ABB said it had the financial liquidity to withstand the downturn.
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