Wartsila Reports Earnings for Q1

Wartsila has reported interim results of net income before taxes of 96 million euro, or 0.37 euro per share, on revenues of 882 million euro for the first quarter ended March 31, 2013, compared to net income before tax of 93 million euro, or 0.33 euro per share, on revenues of approximately 1.0 billion euro for the same period last year.

Revenue for the first quarter was divided among different categories with services representing 434 million euro, ship power, 245 million euro, power plants, 202 million euro and so-called other, 2 million euro.

The orderbook is approximately 5.0 billion euro with ship power being the largest category at about 2.3 billion euro, powerplants 1.8 billion euro and services 869 million euro.

Wartsila stated that the general macroeconomic uncertainty and the slow global growth projections are expected to continue to impact the global power generation markets. Thus, the company expects that the overall market for natural gas and liquid fuel based power generation in 2013 will be similar to 2012.

In 2013 ordering activity is expected to remain focused on the emerging markets, which continue to invest in new power generation capacity. In the OECD countries, there is still pent-up power sector demand, mainly driven by CO2 neutral generation and the ramp down of older, mainly coal-based generation, according to the company.

Wartsila said its outlook for the shipping and shipbuilding markets in 2013 is cautious, although market conditions are expected to be better than in 2012. Despite the recent pick up in orders, financing and overcapacity related issues are still visible in the traditional merchant markets.

The orders placed in these markets focus more on fuel-efficient design and technology, and the. current emission regulations create interesting opportunities for environmental solutions.

The contracting mix is expected to be in line with that seen in 2012, favoring contracting in the offshore and specialized vessel segments.

The outlook for gas demand remains healthy, and the attractiveness of LNG as a fuel is supported by its low carbon intensity, global trade, and pricing.

Also, according to Wartsila, the overall service market outlook remains stable despite the slower start in 2013 compared to 2012. A continued increase in the medium-speed engine and propulsion installed base helps to balance the market environment in regions such as Europe, where the market is expected to remain challenging – especially on the marine side.

The outlook for the Middle East and Asia continues to be slightly more positive, supported by interest in power plant related service projects. The outlook is also good in the Americas, where there is a mix of marine and power customers. The outlook for offshore services remains positive.

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