Wärtsilä Corporation Interim Report q2 2014

Order intake

Wärtsilä’s order intake for the second quarter increased by 9% to EUR 1,163 million (1,071). In relation to the previous quarter, Wärtsilä’s order intake increased by 2% (EUR 1,142 million in the first quarter of 2014). The book-to-bill ratio for the second quarter was 1.03 (0.93).

The order intake for Power Plants in the second quarter totalled EUR 244 million (217), which was 12% more than for the corresponding period last year. Compared to the previous quarter order intake increased by 48% (EUR 165 million in the first quarter of 2014). During the second quarter, Wärtsilä received a 47 MW turnkey power plant order from Saudi Arabia. Ordering activity was globally fragmented.

The second quarter order intake for Ship Power totalled EUR 409 million (384), an increase of 6% compared to the corresponding period last year. Compared to the previous quarter order intake decreased by 12% (EUR 467 million in the first quarter of 2014). Ordering activity was highest in gas carriers and in the offshore segment. Offshore related orders included an order to supply generating sets, each fitted with an SCR catalyst, for two new well intervention vessels being built for Siem Offshore A/S of Norway. In the cruise & ferry segment, Wärtsilä received an order from Finnlines to supply exhaust gas cleaning systems for six of its vessels operating in the Baltic and North Seas. Interest in exhaust gas cleaning systems picked up somewhat during the second quarter, with a total of 11 systems ordered for 10 vessels. The merchant segment represented 50% of the second quarter order intake, while the offshore segment’s share was 28% and navy orders accounted for 10%. The cruise & ferry segment’s share of the order intake was 6% and the special vessels segment’s share was 5%. Other orders accounted for 1% of the total.

Order intake for the Services business totalled EUR 510 million (469) in the second quarter, an increase of 9% compared to the corresponding period last year. Compared to the previous quarter the order intake was stable (EUR 510 million in the first quarter of 2014). Several marine service contracts were signed during the second quarter. In the LNG segment, Services signed technical management agreements covering a total of 15 vessels with three Greek vessel owners; Dynagas Ltd, TMS Cardiff Gas Ltd, and Maran Gas Maritime Inc. A three-year services supply agreement was signed with the Norwegian DOF Group covering service for all Wärtsilä equipment on some 30 vessels operating in Norway, Brazil and Singapore. Furthermore, two vessels were added to the existing five-year maintenance agreement between Wärtsilä and US-based Prestige Cruise Holdings, Inc.

The total order intake for the review period January-June 2014 was EUR 2,305 million (2,424), which represents a decrease of 5% compared to the corresponding period in 2013. The book-to-bill ratio for the review period was 1.07 (1.19). Power Plants’ order intake was EUR 409 million (623), which is 34% lower than in 2013. Ship Power’s order intake was EUR 875 million (827), an increase of 6% from the corresponding period last year. Services’ order intake for the review period totalled EUR 1,021 million (974), an increase of 5% over the corresponding period in 2013.

Order intake by business
MEUR 4-6/2014 4-6/2013 Change 1-6/2014 1-6/2013 Change 2013
Power Plants 244 217 12% 409 623 -34% 1 292
Ship Power1 409 384 6% 875 827 6% 1 695
Services 510 469 9% 1 021 974 5% 1 885
Order intake, total 1,163 1,071 9% 2,305 2,424  -5% 4,872
1 The comparison figures have been adjusted to reflect the combination of PowerTech and Ship Power, which became effective on 1 January 2014.
Order intake Power Plants
MW 4-6/2014 4-6/2013 Change 1-6/2014 1-6/2013 Change 2013
Oil 309 67 361% 470 204 130% 444
Gas 281 286 -2% 516 909 -43% 1 957
Order intake, total 590 353  67% 986 1,113  -11% 2,401

Order intake in joint ventures

Order intake in the Wärtsilä Hyundai Engine Company Ltd joint venture company in South Korea and the Wärtsilä Qiyao Diesel Company Ltd joint venture company in China totalled EUR 92 million (113) during the review period January-June 2014. Wärtsilä’s share of ownership in these companies is 50%, and the results are reported as a share of the result of associates and joint ventures.

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