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By Nieck Ammerlaan
ZURICH, Jan 23 (Reuters) - New orders at Sulzer's core divisions fell by three percent to 1.86 billion Swiss francs ($1.36 billion) in 2002, the Swiss machinery and engineering services firm said on Thursday.
The company, which is battling poor end-markets and a strong franc, reiterated it expected full-year operating income to be clearly positive, but below the 2001 level of 119 million francs, while 2002 net profit would be "respectable". Prospects for 2003 were very hard to assess now.
Adjusted for acquisitions, divestitures and currency effects, order intake was up two percent.
The full-year order numbers, which came in in line with analyst estimates, signalled demand for Sulzer's products which range from repair services to large industrial pumps stabilised in the final quarter of last year.
The firm, which did not publish a quarterly breakdown, had said in October new orders for the core businesses had contracted by three percent after a flat first half.
Sulzer's caution on the prospects for 2003 affirmed comments made by Chief Executive Fred Kindle to Reuters last week.
He warned Sulzer might have to push back its targets -- sales of three billion francs and a EBITA margin of nine percent by 2005 -- if the world economy continued to flag and war with oil producer Iraq broke out.
Last March, it already pushed back the timeframe for its business plan by a year, to 2005, citing a weak economy.
If 2003 were another flat year, the firm would have to "go over the books", he said. Targets would be reviewed by mid-2003.
Analysts see sales in 2002 steady at 1.9 billion francs and say dampened prospects in 2003 curb the success of a recent streamlining to make it less sensitive to swings in the economy.
They forecast 2003 net profit of 45 million to 65 million francs, compared to an estimated 60 million in 2002.
Order intake at Metco surface coatings, supplying the aviation and gas turbines markets among others, matched the prior year level at 430 million francs.
Order intake by Turbomachinery Services, which repairs and refurbishes turbines, fell by six percent to 193 million, reflecting the U.S. energy market crisis.
Metco and Turbomachinery Services have been earmarked by Sulzer as growth businesses, with the funding for their expansion being generated by Pumps -- the largest division in sales and orders terms -- and Chemtech.
Pumps order intake declined by four percent to 942 million, while order intake at the Chemtech process technology business eased one percent to 299 million with demand still unsatisfactory in North America.