Wärtsilä Corporation Financial statements bulletin 2015

Order intake

Fourth quarter order intake

Wärtsilä’s fourth quarter order intake totalled EUR 1,403 million (1,522), a decrease of 8% from the corresponding period last year. Compared to the previous quarter, the order intake increased by 29% (EUR 1,086 million in the third quarter of 2015). The fourth quarter book-to-bill ratio was 0.88 (0.98).

Order intake for Energy Solutions totalled EUR 366 million (501) in the fourth quarter, which was 27% lower than in the corresponding period last year. Compared to the previous quarter, the order intake more than doubled (EUR 167 million in the third quarter of 2015). Received orders included two power plants of approximately 50 MW from the USA, as well as a 111 MW power plant from Mexico.

Marine Solutions’ fourth quarter order intake totalled EUR 465 million (460). Compared to the previous quarter, the order intake increased by 14% (EUR 407 million in the third quarter of 2015). In the gas carrier segment, Wärtsilä received an order to supply gas cargo handling systems to eleven new gas carriers, as well as an order to supply cargo and propulsion systems for a new LNG carrier being built for Saga LNG Shipping. Other noteworthy gas related orders included a contract to supply the main engines, gearboxes, propellers and the fuel gas handling systems for a series of 15 LNG powered inland waterway barges to be chartered by Shell. Wärtsilä also received an order to supply thrusters and auxiliaries for the world’s largest crane vessel being built for Heerema Offshore Services in the Netherlands.

Order intake for the Services business totalled EUR 572 million (561) in the fourth quarter, an increase of 2% over the corresponding period last year. Compared to the previous quarter, the order intake increased by 12% (EUR 511 million in the third quarter of 2015) thanks to seasonal demand development and increased market activity in long-term agreements.

Review period order intake

Wärtsilä’s order intake for the review period January-December 2015 was EUR 4,932 million (5,084), which represents a decrease of 3% compared to the corresponding period in 2014. The book-to-bill ratio for the review period was 0.98 (1.06).

Order intake for Energy Solutions totalled EUR 1,009 million (1,293) in the review period, a decrease of 22% from the corresponding period last year. Of the orders received, measured in MW, 46% were for gas based power plants. Turkish owners contributed to the high level of activity in Europe, while in the USA several orders were received for peaking and renewable support power plants.

Marine Solutions’ review period order intake declined by 8% to EUR 1,599 million (1,746). Considering the general slowdown in vessel contracting and the further weakening of the offshore market, this was a satisfactory result. Order intake for Marine Systems International, acquired during the financial period, developed well. The gas carrier segment represented 38% of the order intake for the review period, while the conventional merchant share was 18% and cruise & ferry accounted for 15%. The special vessels segment represented 10%, the offshore segment 8% and navy 4%. Other orders accounted for 6%. In line with the Marine Solutions strategy, Wärtsilä received several orders for the delivery of integrated solutions. Highlights included the contract to supply engines, controllable pitch propellers, transverse thrusters and an LNGPac gas supply and storage system to the world’s first duel-fuelled dredger being built for DEME Group. Other strategically significant orders included the first order for the new generation Wärtsilä 31 engine, which was launched in June. Interest in environmental solutions continued to increase during 2015. A noteworthy order in this respect was the contract to retrofit eleven container vessels owned by Bernhard Schulte GmbH & Co. KG with Wärtsilä Aquarius Ballast Water Management Systems. The development in exhaust gas cleaning systems orders was stable. During 2015, the Wärtsilä 34DF engine strengthened its market position, with three major South Korean shipyards supporting the use of this engine for auxiliary applications in the LNG carrier segment.

Services’ order intake for the review period increased by 14%, totalling EUR 2,324 million (2,045), supported by increased demand for service projects and long-term agreements. Larger service projects included an order from Shanghai Electric Power to convert the Maltese Delimara Power Station to operate on natural gas, as well as several propulsion system upgrade projects. Customers with gas fuelled vessels showed particular interest in signing long-term agreements. The signed contracts included a 5-year technical management agreement with Golar Management Oslo for its LNG carrier fleet, and a maintenance agreement with GasLog LNG Services Limited to ensure the reliable operation of GasLog’s seven LNG carriers. Power plant related service agreements included a 10-year operations and maintenance agreement for Central Generadora Electrica Huinala’s flexicycle power plant, located near Monterrey, Mexico.

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Order intake by business
MEUR 10-12/2015 10-12/2014 Change 1-12/2015 1-12/2014 Change
Energy Solutions 366 501 -27% 1 009 1 293 -22%
Marine Solutions1 465 460 1% 1 599 1 746 -8%
Services 572 561 2% 2 324 2 045 14%
Order intake, total 1 403 1 522 -8% 4 932 5 084 -3%
1 Marine Systems International's contribution to order intake was EUR 111 million in the fourth quarter of 2015 and EUR 264 million in the review period January-December.
Order intake Energy Solutions
MW 10-12/2015 10-12/2014 Change 1-12/2015 1-12/2014 Change
Oil 221 189 17% 1 303 980 33%
Gas 528 584 -10% 1 132 1 509 -25%
Order intake, total 749 773 -3% 2 436 2 489 -2%

Order intake in joint ventures

Order intake in the Wärtsilä Hyundai Engine Company Ltd joint venture company in South Korea, and in the Wärtsilä Qiyao Diesel Company Ltd and CSSC Wärtsilä Engine Company Ltd. joint venture companies in China totalled EUR 182 million (306) during the review period January-December 2015. The results of these companies are reported as a share of the result of associates and joint ventures.

 

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