ABB India expects no ‘significant adjustments’ due to COVID-19

ABB India, the local unit of the Swiss-Swedish machinery and equipment maker, said it does not “anticipate any significant adjustments” due to the impact of the COVID-19 pandemic and the subsequent lock down.

“The Company has evaluated the liquidity position, recoverability, carrying value of its assets and does not anticipate any significant adjustments at this stage barring any unforeseen circumstances…

“The Company has adequate banking lines to take care of the current & future cash requirements. The Company foresees strong support of its long
standing relationship with customer base to tide over the challenging Covid-19 period,” it added.

A significant adjustment refers to taking a one-time charge, such as a write-off or impairment charge, to account for losses caused by an unforeseen event.

The company’s statement indicates that it will be able to absorb the impact of the COVID-19 lockdown at the level of its regular operating fluctuations.

Nevertheless, it clarified that the sales of its products have been impacted by the lock down.

“..we state that there is impact on the Company’s performance in April – June Quarter consequent to Covid-19 pandemic spread and Lockdown mandated by the government across the country since March 24, 2020. The real impact could be assessed only when the Company finalizes its financial performance for April-June Quarter and announces the results to the public end July 2020,” said ABB India, which specializes in electrical and industrial equipment.

It said it is operating at 50-60% capacity at present, having restarting manufacturing operations in mid-May.

“The Company would further ramp up its manufacturing activities in
line with the demand pick up and supply chain stabilization going forward.”

The update was provided in the context of last month’s circular from Securities and Exchange Board of India or SEBI, directing listed companies to routinely keep updating their investors of any material impact of the COVID-19 pandemic on their operations and finances.

ABB, whose clients mainly constitute various power distribution companies and mega industries, said it was adjusting resources to meet he anticipated slowdown in demand and eliminating nonessential costs and reviewing its order book position for executability.

It said all its various segments of operations — such as electrical equipment, automation, motion and so on — have not the same trend as far as recovering from the impact of the lock down is concerned.

“Certain market segments’ demand is ramping up faster than others post lockdown lifting in mid of May 2020,” it said.

“The Company is of the view that the various measures that the Government is implementing from time to time and with relaxation of lookdowns in a phased manner, will help improve the off take in diverse market segments where company is engaged over the next few quarters,” it added.