ABB slashed costs brutally last year

Investors were cheered - with shares rising 3% - by the news that ABB had hit its ambitious debt reduction target, but remained concerned over the firm's prospects for growing its business.

ABB, once one of the best-regarded industrial companies in the world, said its 2002 net loss had widened to $787m (�497m), twice as much as analysts had predicted.

The company fell into difficulties last year, after missing a series of performance targets, and admitting immeasurable liabilities from asbestos-related litigation in the US.

Make or break

Having settled the asbestos lawsuits in January, ABB hopes to have drawn a line under last year's poor performance.

This year is crucial, Mr Dormann says

The company now needs to start generating cash much faster in order to rebuild investor optimism, and keep debt repayments on schedule.

Shareholders are concerned that, if debt targets are missed, the firm may have to launch a rights issue.

Chairman and chief executive Juergen Dormann told Swiss television that the next 12-18 months were decisive for ABB and would decide whether it could remain independent.

ABB's goal is to cut total debt to $6.5bn by the end of 2003 and $4bn by 2004.