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Wärtsilä Interim Report Yields Insight Into Marine Solutions Sales Performance

Wärtsilä Corporation’s half year financial report has shined some light on the company’s stable sales performance, highlighting that marine solutions orders have held up ‘fairly well’ during the six-month period.

The Finnish power and propulsion giant recently shared their Interim Report January-June 2016 which details how the company’s order intake across all divisions increased by 1% over the period, however net sales also decreased by 2% over the six-month period.

For Wärtsilä’s Marine Solutions’ business, orders have also held up fairly well considering the low level of vessel contracting, benefitting from announced fleet renewal activity in the cruise and ferry markets. Services’ net sales have grown at a slower pace; however, they expect improved activity levels to support a pick-up in volumes in the coming quarters.

The company has said that the developments in the first half of 2016 were satisfactory given current market conditions and prevailing challenges in their operating environment and that they expect its net sales for 2016 to grow by 0-5% and its profitability (comparable operating result as a percent of net sales) to be 12.5-13.0%.

The President and CEO, Jaakko Eskola stated that net sales remained broadly in line with the previous year, while the lower level of power plant deliveries and tight competition in the energy markets burdened their operating result. He also stated that based on the current trends in Wärtsilä’s end markets and the increased uncertainty in the global economy, their outlook for demand development remains cautious.

The complete report can be downloaded from: http://www.wartsilareports.com/en-US/2016/q2/frontpage/

KEY FIGURES:

MEUR 4-6/2016 4-6/2015 Change 1-6/2016 1-6/2015 Change 2015
Order intake 1 194 1 159 3% 2 465 2 443 1% 4 932
Order book at the end of the period       5 083 5 325 -5% 4 882
Net sales 1 196 1 230 -3% 2 163 2 218 -2% 5 029
Operating result1 96 137 -30% 179 237 -24% 587
% of net sales 8.0 11.1   8.3 10.7   11.7
Comparable operating result 122 137 -11% 206 237 -13% 612
% of net sales 10.2 11.1   9.5 10.7   12.2
Comparable adjusted EBITA 131 144 -9% 224 250 -11% 643
% of net sales 10.9 11.7   10.3 11.3   12.8
Profit before taxes2 58 140 -59% 138 222 -38% 553
Earnings/share, EUR2 0.19 0.54   0.49 0.97   2.25
Cash flow from operating activities 202 47   189 84   255
Net interest-bearing debt at the end of the period       517 495   372
Gross capital expenditure       71 297   346
Gearing       0.25 0.25   0.17
1Items affecting comparability included restructuring costs of EUR 26 million in the second quarter of 2016, of which EUR 17 million were non-cash write-downs. During the review period January-June 2016 restructuring costs amounted to EUR 27 million.
2Write-downs of approx. EUR 42 million related to the divestment of the Winterthur Gas & Diesel joint venture, realised exchange rate losses from Brazilian projects, and other receivables were recognised in the results for the second quarter of 2016.

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