Wärtsilä Corporation Interim Report q3 2014

Order intake

Wärtsilä’s order intake for the third quarter increased by 21% to EUR 1,309 million (1,086). In relation to the previous quarter, Wärtsilä’s order intake increased by 15% (EUR 1,138 million in the second quarter of 2014). The book-to-bill ratio for the third quarter was 1.17 (0.91).

The order intake for Power Plants in the third quarter totalled EUR 383 million (261), which was 47% more than for the corresponding period last year. Compared to the previous quarter, the order intake increased by 57% (EUR 244 million in the second quarter of 2014) with ordering activity being evenly spread globally. Highlights of the third quarter was the 139 MW turnkey order received from Mexico and the 112 MW order received from North Dakota. Other important orders were received from Senegal, Suriname and elsewhere in the USA.

Despite the slight slowdown in vessel contracting during the third quarter, Ship Power’s order intake developed well, increasing by 24% to EUR 463 million (372). Compared to the previous quarter, the order intake increased by 21% (EUR 383 million in the second quarter of 2014). All segments contributed to this improvement, with especially strong activity in gas carriers and cruise vessels. Among noteworthy orders in the gas carrier segment was an order to deliver gas handling systems to six very large ethane carriers being built for the Reliance Group based in India. There was continued interest in environmental solutions during the third quarter. A total of 11 exhaust gas cleaning systems were ordered for 6 vessels, and in the merchant segment Wärtsilä received an order to deliver ballast water management systems to 22 bulk carriers being built for Pioneer Marine based in Singapore. The gas carrier segment represented 41% of the third quarter order intake, while the cruise & ferry segment’s share was 26% and the offshore segment accounted for 16%. The special vessels segment and the traditional merchant segment each accounted for 6% of order intake, while the navy segment’s share was 3%. Other orders accounted for 2% of the total.

Order intake for the Services business totalled EUR 463 million (454) in the third quarter of 2014, an increase of 2% compared to the corresponding period last year. In relation to the previous quarter, the order intake decreased by 9% (EUR 510 million in the second quarter of 2014). Interest in long-term service agreements for gas fuelled vessels remained solid. During the third quarter, Wärtsilä signed a five-year technical management agreement with Harvey Gulf International Marine LLC covering condition based maintenance and dynamic maintenance planning for six liquefied natural gas fuelled platform supply vessels and two offshore construction vessels.

The total order intake for the review period January-September 2014 was EUR 3,562 million (3,487), which represents an increase of 2% compared to the corresponding period in 2013. The book-to-bill ratio for the review period was 1.10 (1.09). Power Plants’ order intake was EUR 792 million (884), which is 10% lower than in 2013. Ship Power’s order intake was EUR 1,286 million (1,176), an increase of 9% from the corresponding period last year. Services’ order intake for the review period increased by 4%, totalling EUR 1,484 million (1,428).

Order intake by business
MEUR 7-9/2014 Restated
7-9/2013
Change 1-9/2014 Restated
1-9/2013
Change Restated
2013
Power Plants 383 261 47% 792 884 -10% 1 292
Ship Power1 463 372 24% 1 286 1 176 9% 1 644
Services 463 454 2% 1 484 1 428 4% 1 885
Order intake, total 1,309 1,086 21% 3,562 3,487 2% 4,821
Discontinued operations 15 11 39% 67 33 101% 51
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 7-9/2014 7-9/2013 Change 1-9/2014 1-9/2013 Change 2013
Oil 321 150 114% 791 355 123% 444
Gas 408 523 -22% 925 1 431 -35% 1 957
Order intake, total 730 673 8% 1,716 1,786 -4% 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 126 million (143) during the review period January-September 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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