ZURICH: Swiss engineering group ABB reported a rise in smaller orders and signs of recovery in some sectors hit by recent cutbacks by oil and gas companies, saying these were a better guide to the future than a drop in volatile big-ticket orders.
The transmission and industrial automation company said its overall order intake fell 3 percent in the three months ended March 31, when adjusted for currencies and divestments, halting an uptick at the end of 2016.
But ABB Chief Executive Ulrich Spiesshofer said he was encouraged by the 2 percent growth in base orders — projects under $15 million — which he said were the most reliable indicator of growth in the business.
Sales adjusted for currency fluctuations and divestments also rose by 3 percent, ABB’s best performance since the second quarter of 2015.
“Base orders in three of our four divisions are up,” Spiesshofer said.
“Large orders are lumpy. They fluctuate from quarter to quarter, and this quarter had lower larger orders. This is something I wouldn’t take as the overall sentiment.”
Before the fourth quarter of 2016, ABB’s order book had fallen for six straight quarters, putting pressure on the company to turn around its fortunes and catch up with rivals such as Germany’s Siemens.
Analysts said the order downturn was expected, and ABB’s stock rose 2 percent in early trading following earnings that beat forecasts.
A $200 million gain from one-offs including selling its high voltage cable business to Denmark’s NKT Cables last year, helped ABB lift net profit by 45 percent to $724 million, ahead of forecasts of $489 million in a Reuters poll.
Revenue fell 1 percent to $7.85 billion, though it rose 3 percent after stripping out the effect of divestments and currency fluctuations. The performance was highlighted by Barclays analyst James Stettler as ABB’s highest sales performance in two years.
In recent quarters, ABB has been wrestling with reduced orders from process industries such as oil and gas where customers have reacted to lower raw materials prices by postponing or canceling investments in new equipment.
Oil prices will likely continue to influence ABB’s results during 2017, the company said, while political uncertainties linked to developments such as Britain’s exit from the European Union would also weigh.
But Spiesshofer said he was seeing the “first signals of market stabilization in some process industries, as well as some growth signals in early-cycle businesses.”
The company said some macroeconomic signs in the US remained positive, while growth in China was expected to continue. The two countries are ABB’s two largest markets.
ABB sees some signs of recovery in sectors hit by energy downturn
ABB sees some signs of recovery in sectors hit by energy downturn
Saudi Arabia sets first-ever rules for beach operators on Red Sea coast
RIYADH: Saudi Arabia’s Red Sea tourism regulator has issued its first set of beach operating rules, laying out licensing, safety and environmental standards as the Kingdom moves to commercialize its coastline.
The Saudi Red Sea Authority said the new Beach Operators’ Requirements and Conditions establish a regulatory framework for beach operations, covering areas such as security, public health, environmental protection and infrastructure standards.
The rules are intended to support investment in coastal tourism while ensuring compliance with sustainability and safety benchmarks, as Saudi Arabia expands leisure and hospitality offerings along its western coast as part of Vision 2030.
The move builds on earlier efforts to position coastal tourism as a key economic pillar. In 2024, the authority and the Ministry of Investment released an “Invest in Coastal Tourism” report that identified the Red Sea coastline as central to Vision 2030 plans, including a target of attracting 19 million visitors.
In a release, the authority stated: “These requirements serve as a comprehensive operational and regulatory framework for issuing beach operation licenses. They define conditions related to security, safety, public health, and environmental protection, establishing a new phase governed by high-quality standards aligned with international best practices and experiences.”
It added: “This framework aims to deliver an optimal beach experience for visitors and, in the long term, enhance service quality, safety standards, beach sustainability, marine environmental protection, and overall attractiveness. The requirements are designed to act as an official reference for operators seeking to develop or operate beaches.”
The requirements also address beach design, development, and construction in line with the Saudi Building Code, ensuring architectural and structural compliance. They include accessibility for people with disabilities, enforcement of safety, security, and environmental measures, and alignment with high-quality standards, including those of the Blue Flag eco-label.
The regulations outline licensing procedures and documentation requirements, including commercial registration, environmental permits, marine zoning approvals, beach safety plans and capacity assessments. Operators must also separate swimming areas from other marine activities, provide safety and rescue equipment, ensure trained lifeguards are on duty and install clear signage.
“The requirements further impose strict environmental controls, including the prevention of pollutant discharge, effective waste management, the use of environmentally friendly materials, activation of environmental monitoring mechanisms, and immediate reporting of any environmental incident to preserve ecological balance,” it added.
The rules will come into force one month after their announcement, with existing beach operators granted a one-year transition period to comply with the new technical and environmental standards.
Saudi Arabia aims for coastal tourism in the Red Sea region to contribute about SR85 billion ($22.6 billion) to gross domestic product by 2030, generate more than 210,000 jobs, and capture a significant share of leisure tourism and entertainment spending.
