Engineering services company ABB India on February 12 registered a massive 80.5 percent year-on-year fall in third quarter profit due to lower value of solar inverter business in books.
The profit dropped to Rs 38.7 crore during the October-December period, against Rs 197.9 crore in the same period last year.
The company reported an exceptional loss of Rs 69.7 crore as it valued solar inverter business, which it sold to Italian Company, at a lower cost in its books.
The board on July 9 last year granted in-principle approval for the sale of solar inverter business to an Italian Company, FIMER S1p.A.
Consequently, the company has classified the assets as at December 31, 2019, pertaining to the Solar Inverter Business as Assets held for sale and measured the same at lower of cost and fair value (fair value less cost of sell).
Hence, the company has accounted exceptional cost amounting to Rs 69.70 crore towards the remeasurement of fixed assets and inventories at realisable values, ABB said in its BSE filing.
The company follows January-December as its financial year.
Profit from continuing operations stood at Rs 65 crore for the quarter (down 49.2 percent YoY), while the loss from discontinued operations was at Rs 26 crore in December quarter against profit of Rs 69.3 crore in year-ago period.
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Revenue from operations fell 0.7 percent to Rs 1,953.3 crore YoY. Other income more than doubled to Rs 38.4 crore in Q4CY19, from Rs 16 crore in Q4CY18.
In 2019, ABB India reported a 40.61 percent decline in profit at Rs 303.4 crore compared to the previous year, but revenue grew by 9.34 percent to Rs 7,315.06 crore.
Distribution solutions was a growth driver for revenue with improved execution. Robotics and Discrete Automation successfully steered applications to deployment in non-automotive sectors like consumer electronics and food and beverage, the company said.
Total orders were at Rs 1,596 crore during the quarter and for CY 2019 orders were at Rs 6,970 crore, against Rs 1,899 crore and Rs 6,729 crore respectively.
"Despite countering market headwinds, Robotics and Discrete Automation and Industrial Automation both posted double-digit growth in orders of 31 percent and 13 percent respectively YoY. Motion business had a
high base given one-time large order in Q4 2018 while Q4 2019 had witnessed some order deferments to subsequent periods," company said.
Company said the order backlog at Rs 4,123 crore provided revenue visibility in shorter business cycles and allowed it to capitalise on market developments in the coming quarters.
The stock was quoting at Rs 1,289.55, down Rs 44.40, or 3.33 percent on the BSE at 14:48 hours.
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