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Reporting segment: Wärtsilä Marine Business

In the marine and oil & gas industries, no other company has a broader offering of technologically advanced, environmentally sustainable, and economically sound solutions. We are leading the industry’s transformation towards a Smart Marine Ecosystem, whereby real-time communication and the digitalisation of all aspects of shipping and port operations, are utilised to create long-term value for our customers and partners. With an integrated product portfolio comprising full lifecycle solutions that are supported by the market’s most extensive service network, we are able to optimise performance and achieve the safest, smartest, most ecological and efficient operating profiles possible.

  • A favourable vessel contracting mix supported order intake development in January-June, despite the decline in overall vessel orders
  • Profitability was affected by the higher proportional share of equipment deliveries
Key figures
MEUR 4-6/2019 4-6/2018 Change 1-6/2019 1-6/2018 Change 2018
Order intake 936 1 027 -9% 1 859 1 905 -2% 3 945
of which services 413 426 -3% 825 875 -6% 1 747
Order book, end of period 3 974 3 244 23% 3 651
Net sales 801 685 17% 1 534 1 304 18% 2 815
of which services 409 389 5% 778 744 5% 1 577
Book-to-bill 1.17 1.50 1.21 1.46 1.40
Operating result 61 54 13% 116 109 7% 349
% of net sales 7.6 7.9 7.6 8.3 12.4
Comparable operating result 76 64 19% 137 121 13% 380
% of net sales 9.5 9.4 8.9 9.3 13.5
Personnel, end of period 13 598 13 609 0% 13 582

Operating environment

During the first half of 2019, 420 contracts for new vessels were registered (472). The slowing global economy, trade tensions, and higher newbuilding prices resulted in low contracting activity in the container, tanker, and bulker markets. Contracting remained healthy in the gas carrier segment, thanks to the growth in demand for liquified natural gas (LNG), firming rates, the expected increase in seaborne LNG trade, and the trend towards cleaner fuels. The need for modern capacity to meet anticipated growth in passenger volumes continued to support activity in the cruise and ferry segments, and customers are showing increased interest in the benefits of connectivity and data driven solutions. Market conditions in the offshore newbuild market remained burdened by overcapacity, volatile oil prices, and competition from onshore shale oil.

The entry into force of the 2020 global sulphur cap is approaching. While the current pricing and availability of compliant fuels are supportive of investments in scrubber technology, uncertainty regarding future developments and limited delivery capacity for this year have delayed decision-making among some customers.

Activity in the marine service markets improved slightly during the period January-June. The offshore marine service sector is showing some positive signals with a gradual re-activation of newer laid-up offshore support vessels (OSVs). The demand for services in the traditional merchant and gas carrier segments continued to be at a good level.

Financial development

Wärtsilä Marine’s second quarter order intake decreased by 9% to EUR 936 million (1,027) compared to the corresponding period last year. Book-to-bill was 1.17 (1.50). Services orders decreased by 3% to EUR 413 million (426), while fewer orders for scrubber systems resulted in equipment orders decreasing by 13% to EUR 523 million (601). Demand was highest in the merchant segment, which, including both traditional merchant vessels and gas carriers, represented 40% and 38% of the order intake of equipment and services respectively. Activity remained healthy also in the cruise and ferry markets.

Second quarter net sales increased by 17% to EUR 801 million (685) compared to the corresponding period last year. Services net sales increased by 5% to EUR 409 million (389), while equipment net sales increased by 32% to EUR 392 million (296). The comparable operating result for the quarter was EUR 76 million (64), or 9.5% of net sales (9.4).

Order intake for January-June decreased by 2% to EUR 1,859 million (1,905). Book-to-bill was 1.21 (1.46). Services orders decreased by 6% to EUR 825 million (875), while equipment orders were stable at EUR 1,034 million (1,030). The order book at the end of June amounted to EUR 3,974 million (3,244), which is 23% higher than last year, thanks largely to the strong demand for exhaust gas cleaning systems in 2018.

January-June net sales increased by 18% to EUR 1,534 million (1,304) compared to the corresponding period last year. Services net sales increased by 5% to EUR 778 million (744), while equipment net sales increased by 35% to EUR 756 million (560). The comparable operating result during the same period amounted to EUR 137 million (121), which represents 8.9% of net sales (9.3). Profitability was affected by the higher proportional share of equipment deliveries.

 

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