Net sales decreased by 3% to €1,246 mill in 2Q18 but were stable at €2,312 for 1H18.
The comparable operating result for 2Q18 was stable at €123 mill but increased to €211 mill for 1H18. Cash flow from operating activities increased to €41 mill in 2Q18 but decreased to minus €1 mill for the sixth month period.
The orderbook at the end of the six month period increased 16% to €5,904 mill.
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:
• Good in Services, although there are concerns related to fuel price development and escalating trade tensions.
• 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 (raised from solid), supported by an extensive product mix and a broad market exposure.
Wärtsilä’s current order book for 2018 deliveries is €2,336 mill, which mainly comprises equipment deliveries. Services’ business is largely transactional, with only around 30% of annual net sales coming from the orderbook.
President and CEO, Jaakko Eskola said; “The positive momentum in ordering activity continued in the second quarter of 2018. Although vessel contracting activity has been somewhat slower than anticipated, our extensive portfolio of solutions and a favourable contracting mix resulted in the Marine Solutions’ order intake developing well. I am pleased to note the increased demand for exhaust gas cleaning solutions in both the newbuild and retrofit markets ahead of the global sulfur regulations, which enter into force in 2020.
“In the Services business, we have also seen continued interest in service agreements, the agreement to optimise the maintenance of all Wärtsilä thrusters installed within the Transocean fleet being a highlight of the quarter. Market trends remain favourable in the Energy Solutions business, and our project pipeline provides confidence for improved activity in the second half.
“Net sales in the second quarter were affected by the timing of power plant deliveries and by customers continuing to limit spending to essential repairs and maintenance, while the operating profit was in line with last year. Looking ahead, we expect deliveries to be concentrated to the latter part of the year.
“A pick up in transactional service activity and the resulting effect on the group sales mix will be central to the development of our profitability in the second half. The impact of increased geopolitical uncertainty on customer decision-making remains a concern.
“Maximising renewable generation is essential in ensuring a sustainable and profitable future for the energy industry. In this context, Wärtsilä has launched a new vision for the energy market. Our ambition is to lead the industry’s transformation towards a future that utilises 100% renewable energy, with flexible capacity as the enabler. Coupled with our Smart Marine vision, this reinforces our commitment to developing sustainable societies with smart technology,” he concluded.
Wärtsilä also confirmed that its Aquarius UV ballast water management system (BWMS) has successfully completed all testing procedures required for United States Coastguard (USCG) type approval compliance.
The documentation for full USCG type approval is being finalised for submission and awaits only final input from DNV GL, the USCG approved independent laboratory.
Wärtsilä’s offering also includes it’s Aquarius EC BWMS, which was type approved by the IMO’s MEPC in 2013, and which has been submitted for USCG type approval following successful testing procedures.
“The reliability, robustness, and efficiency of our full BWMS portfolio is clearly endorsed with both the UV and EC technologies having passed the demanding USCG testing protocol. This puts Wärtsilä in a unique position in helping marine operators to meet international regulatory requirements,” said Craig Patrick, sales director, ballast water management systems, Wärtsilä Marine Solutions.