Wärtsilä sees net sales increase

Apr 26 2019

Wärtsilä has reported growth in net sales and a positive development in its profitability for the first quarter of this year.

However, the order intake decreased by 6% to €1,416 mill, compared with €1,507 mill for 1Q18, while the order book increased by 15% to €6,330 mill from €5,490 mill in 1Q18.

Net sales increased 8% to €1,151 mill from €1,066 mill and the comparable 1Q19 operating result increased to €102 mill from €88 mill, which represented 8.9% of net sales.

The company claimed that demand for its services and solutions in the coming 12 months is expected to be in line with the same period in the previous year. Demand by business area is anticipated to be as follows:

• Solid in Wärtsilä Marine Business. Wärtsilä's demand outlook for both services and equipment is supported by an extensive product mix and broad segment coverage, which limits the impact of a slower than anticipated marine market recovery.

• Solid in Wärtsilä Energy Business. The global shift towards renewable energy sources and increasing electricity demand in the emerging markets support the need for distributed and flexible power capacity. However, geopolitical risks and global uncertainty continue to affect customers’ appetite for investments.

Wärtsilä’s current order book for 2019 deliveries is €3,287 mill, compared to €2,951 mill at the end of the first quarter of 2018. Deliveries are expected to be concentrated towards the latter part of the year.

President and CEO, Jaakko Eskola, said; “The beginning of 2019 was marked by growth in net sales, thanks to higher services volumes in both business areas and an increase in marine equipment deliveries. Profitability improved as a result of a more favourable sales mix within our services activities. Looking ahead, we expect net sales and profitability development to be weighted towards the end of the year, due to delivery phasing and the anticipated realisation of savings related to the realignment programme announced in January.

“In the marine industry, the pace of market recovery remains slow. Nevertheless, orders received by Wärtsilä Marine Business increased, primarily because of improved demand in the gas carrier segment where we received several orders for gas handling systems and related technology.

“Despite this positive development, reduced activity in the energy markets resulted in a decline in group order intake. Geopolitical risks and global uncertainty continue to affect our energy customers’ appetite for investments. Furthermore, utilities in the developed world are updating their investment plans, as they strive to achieve ambitious targets for increasing renewable penetration. While this is causing temporary delays in decision-making, we remain well positioned to benefit from the shift to low-carbon energy sources.

“Our new organisational structure formed around two lifecycle businesses became operational at the beginning of the year. I am pleased to note that we have already started to see the initial benefits of this reorganisation in the form of improved co-operation internally with regards to developing and executing our full lifecycle offering.

“This further strengthens my conviction that the change will not only strengthen our partnerships with customers, but also support the progression towards our long-term target of profitable growth,” Eskola concluded.


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