During the preparation of year-end accounts, ABB’s Oil, Gas and Petrochemicals (OGP) activities have qualified to be reported as discontinued operations following ABB’s decision to divest this business in 2003. For comparison, fourth-quarter 2002 orders, revenues, EBIT and EBIT margin are shown below:
Oil, Gas and Petrochemicals
Orders in the quarter increased by 34 percent, driven mainly by several large orders in the Upstream market where demand strengthened. Downstream markets remained flat. Revenues decreased as a result of lower order intake in the previous quarters. Cost overruns and project write-downs of approximately US$ 104 million in the fourth quarter led to a loss.
For the fourth quarter 2002, losses from discontinued operations increased to US$ 710 million following US$ 420 million in provisions for Combustion Engineering, project losses in Oil, Gas and Petrochemicals, and the final divestment costs for Structured Finance. Of Structured Finance’s fourth quarter US$ 78 million divestment cost, US$ 55 million was for currency translation adjustments that were already reflected in stockholders’ equity.
Other divested businesses posted losses of US$ 119 million, mainly due to goodwill write-down.
For the full year 2002, the loss from discontinued operations was US$ 853 million, up from US$ 501 million in 2001. The main items were asbestos provisions, the US$ 135 million divestment loss (excluding the currency translation adjustment) for Structured Finance, and US$ 86 million in losses for the full year for Oil, Gas and Petrochemicals. The OGP loss was after project provisions of US$ 167 million for the year.