Wärtsilä Corporation Financial statements bulletin 2014

Order intake

Fourth quarter order intake

Wärtsilä’s order intake for the fourth quarter of 2014 increased by 14% to EUR 1,522 million (1,334). In relation to the previous quarter, order intake increased by 16% (EUR 1,309 million in the third quarter of 2014). The fourth quarter book-to-bill ratio was 0.98 (0.95).

The order intake for Power Plants in the fourth quarter totalled EUR 501 million (409), which was 23% more than for the corresponding period last year. Compared to the previous quarter, order intake increased by 31% (EUR 383 million in the third quarter of 2014). Significant orders received during the fourth quarter included a 120 MW power plant contract from Oman and contracts for 11 industrial power plants with a combined capacity of 314 MW from the EUROCEMENT group in Russia. Other important orders came from Panama and the USA. In December, Wärtsilä received full notice to proceed with the LNG terminal in Tornio, which was announced earlier in the year.

Ship Power’s order intake in the fourth quarter totalled EUR 460 million (468), a decrease of 2% compared to the corresponding period last year. Compared to the previous quarter, order intake was stable (EUR 463 million in the third quarter of 2014). All segments contributed well to this order intake. In the offshore segment, Wärtsilä received an order to supply integrated solutions for a series of six anchor handling tug supply vessels being built for the Denmark based Maersk Supply Service A/S. The scope of supply comprises the complete power generation solution, the electrical distribution and drive system, the vessel automation system and the propulsion system. Among the noteworthy gas fuelled vessel orders was the integrated solution contract for the world’s first LNG fuelled high speed RoPax ferry being built for the Swedish operator Rederi AB Gotland. Wärtsilä also received an order to supply the design, propulsion and other equipment for an LNG operated harbour tug from Drydocks World based in Dubai, UAE. In the special vessel segment, Wärtsilä was contracted to supply engines for one of the world’s largest cutter dredger vessels being built for Jiangsu Haihong Construction Engineering Co. in China. Within environmental solutions, a total of 12 (11) exhaust gas cleaning systems were ordered for 6 (5) vessels and an order was received to supply 12 ballast water management systems for 6 new bulk carriers being built at the Namura and Onomichi shipyards in Japan.

Order intake for the Services business totalled EUR 561 million (457) in the fourth quarter, an increase of 23% compared to the corresponding period last year. Compared to the previous quarter, the order intake increased by 21% (EUR 463 million in the third quarter of 2014), mainly due to improved demand for spare parts and service projects.

Review period order intake

Wärtsilä’s order intake for the review period January-December 2014 was EUR 5,084 million (4,821), which represents an increase of 5% compared to the corresponding period in 2013. The book-to-bill ratio for the review period was 1.06 (1.05).

For the review period, Power Plants' order intake was stable at EUR 1,293 million (1,292). 61% of the orders received, measured in MW, were for gas based power plants. Activity was high in Russia and the USA. Highlights included the order to supply a 112 MW peaking power plant to North Dakota. Other major orders were the 140 MW power plant order from Mexico, and Wärtsilä’s first order for a turnkey LNG receiving terminal to be built in Tornio, northern Finland.

Despite the slowdown in vessel contracting, Ship Power’s order intake increased by 6% to EUR 1,746 million (1,644) during the review period. The ordering of gas handling systems and dual fuel engines for LNG and LPG carriers was strong, and gas as a marine fuel is being increasingly applied also in other vessel markets. In line with the Ship Power strategy, Wärtsilä received several orders for the delivery of integrated solutions, including ship design, propulsion machinery, automation and other equipment. Among the noteworthy orders was the contract to supply an integrated solution, comprising the main propulsion equipment, the gas fuel supply system, and the cargo handling system, for three multigas carriers being built for the Danish operator Evergas. This order is an extension of the one placed in 2013 for a series of three similar vessels. Important offshore related orders included a contract to supply the design and integrated solutions for four new platform supply vessels being built for Siem Offshore. Customers continued to show interest in environmental solutions. A total of 41 (41) exhaust gas cleaning systems for 26 (17) vessels were ordered during 2014. The gas carrier segment represented 34% of the order intake for the review period, while the offshore segment’s share was 28% and cruise & ferry accounted for 16%. The traditional merchant segment represented 9% of the order intake, special vessels 6% and navy 4%. Other orders accounted for 2%.

Services’ order intake for the review period increased by 9%, totalling EUR 2,045 million (1,885). Several important long-term service agreements were signed during the review period, with particular interest from customers with gas fuelled vessels, as well as cruise customers. Noteworthy contracts included the 10-year maintenance and technical support agreement with Royal Caribbean Cruises Ltd covering 36 vessels, and the 5-year technical maintenance agreements signed with three Greek LNG carrier owners for a total of 15 vessels. Power plant related service agreements included the 5-year renewal of the operation and maintenance agreement with Cemex Colombia.

Order intake by business
MEUR 10-12/2014 Restated
10-12/2013
Change 1-12/2014 Restated
1-12/2013
Change
Power Plants 501 409 23% 1 293 1 292 0%
Ship Power1 460 468 -2% 1 746 1 644 6%
Services 561 457 23% 2 045 1 885 9%
Order intake, total 1,522 1,334 14% 5,084 4,821 5%
Discontinued operations 28 18 56% 95 51 87%
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 10-12/2014 10-12/2013 Change 1-12/2014 1-12/2013 Change
Oil 189 90 111% 980 444 121%
Gas 584 526 11% 1 509 1 957 -23%
Order intake, total 773 615 26% 2,489 2,401 4%

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 181 million (79) in the fourth quarter of 2014. During the review period January-December 2014, order intake amounted to EUR 306 million (222). Wärtsilä’s share of ownership in these joint venture companies is 50%, and the results are reported as a share of the result of associates and joint ventures. In November, Wärtsilä Hyundai Engine Company Ltd received a major order to supply 54 dual-fuel engines to power icebreaking LNG carriers being built for use in arctic conditions. The order was placed by Daewoo Shipbuilding and Marine Engineering and the vessels will serve the Yamal LNG project in northern Russia.

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