Wärtsilä has published its Interim Report for January to September which shows that order intake increased 7% to €4,433 million (4,130), net sales increased 5% to €3,642m (3,471), and comparable operating result improved to €352 (335), which represents 9.7% of net sales (9.7). The order book at the end of the period increased also 16% to €5,918m(5,107).
Third quarter highlights show the order intake stable at €1,372m (1,354), net sales increased 13% to €1,330m (1,175), and the comparable operating result increased to €141m (131), which represents 10.6% of net sales (11.2).
The demand for Wärtsilä’s services and solutions in 2018 is expected to improve somewhat from the previous year. Demand by business area is anticipated to be as follows:
Solid in Services (lowered from good). Although there are growth opportunities in selected regions and segments, the development of transactional service volumes has been slower than anticipated.
Good in Energy Solutions. The global shift towards renewable energy sources and increasing electricity demand in the emerging markets are supporting the need for distributed and flexible power capacity, including gas-fired generation, energy storage, and smart integration technology.
Good in Marine Solutions. Wärtsilä’s demand outlook is supported by its extensive product mix and broad segment exposure, which compensates for the slow pace of recovery in overall vessel contracting.
Wärtsilä’s current order book for 2018 deliveries is €1,364m (1,206) and is comprised mainly of equipment deliveries. Services’ business is largely transactional, with only around 30% of its annual net sales coming from the order book.
Jaakko Eskola, President and CEO, said: “Wärtsilä’s net sales developed well in the third quarter, thanks to the strong growth in newbuild marine and energy deliveries. This, in combination with slower than anticipated development in transactional service volumes, is affecting the group sales mix and burdening profitability.
“In the marine industry, the approaching IMO 2020 sulphur regulations have resulted in increased demand for exhaust gas cleaning systems. This boosted order intake in both Marine Solutions and Services. Marine Solutions’ orders were further supported by the continued high level of activity in the cruise and ferry segment. In the energy markets, postponed investment decisions for certain projects adversely affected Energy Solutions’ order intake. Nevertheless, a healthy project pipeline provides confidence in improved activity going forward.
“In August, Wärtsilä announced that it will build a new centre for research, development and production, in Vaasa, Finland. When finalised in 2020, this Smart Technology Hub will enable more agile and efficient testing, development, and production of solutions for the maritime, oil and gas, and energy industries. Another key step in the execution of our strategies was the decision to reorganise into two business areas, Wärtsilä Marine Business and Wärtsilä Energy Business, as of the beginning of next year. By forming two business areas that cover both new sales and services, we will enhance customer value through a stronger focus on lifecycle solutions tailored to specific market needs. Customers will also benefit from increased flexibility and even faster response times. I firmly believe that this will support our progression towards our long-term financial targets.”