Wartsila Order Intake Up 9 Pct, Finland

Wartsila Order Intake Up by 9 Pct

Wärtsilä Corporation of Finland said its order intake increased 9% to EUR 4,940 million in 2012.

Fourth Quarter Highlights

  • Order intake increased 9% to EUR 1,357 million (1,250)
  • Net sales increased 24% to EUR 1,533 million (1,238)
  • Book-to-bill 0.89 (1.01)
  • Operating result (EBIT) EUR 186 million or 12.2% of net sales (EUR 145 million or 11.7%)
  • EBITA EUR 196 million or 12.8% of net sales (EUR 149 million or 12.1%)
  • Earnings per share amounted to EUR 0.62 (0.45)
  • Cash flow from operating activities EUR 187 million (-71)

Highlight of the Review Period Jauary-December 2012

  • Net sales increased 12% to EUR 4,725 million (4,209)
  • Book-to-bill 1.05 (1.07)
  • Operating result (EBIT) EUR 515 million or 10.9% of net sales (EUR 469 million or 11.1%)
  • EBITA EUR 550 million or 11.6% of net sales (EUR 485 million or 11.5%)
  • At the end of the period the order book increased 12% to EUR 4,492 million (4,007)
  • Earnings per share amounted to 1.72 euro (1.44)
  • Cash flow from operating activities EUR 153 million (232)
  • Dividend proposal 1.00 euro/share

Bjorn Rosengren, President and CEO:

“I am pleased with our result for the year 2012, which was a year marked by difficult conditions in the global economy. Supported by a very strong fourth quarter, Wärtsilä’s full year net sales grew by 12% with profitability at 10.9%. The order intake grew by 9%, with strong development in Ship Power orders, especially in the offshore markets.

“During 2012, we closed our largest ever acquisition with the purchase of Hamworthy. This supports our growth strategy in the marine gas, offshore and environmental solutions markets. Interest in marine gas solutions continued to be strong and the orders received demonstrate our leading position in the dual-fuel markets. As regards environmental solutions, market activity showed an upward trend. In the growing offshore markets, our position is good, not least in Brazil where we secured several important orders. Power Plants received two of their largest orders ever, and Wärtsilä is today recognised as a serious contender in the market for power plants above 500 MWs of capacity. I am also very pleased that the Services net sales have returned to growth and that important long-term service contracts are being secured in tough market conditions.

Looking at 2013, the economic situation continues to be uncertain, however our outlook for the markets remains stable. Supported by the solid order book, we see some growth in net sales next year and believe we can maintain our profitability on approximately the same level as in 2012.”

Prospects for 2013

Wärtsilä expects its net sales for 2013 to grow by 0-10% and its operational profitability (EBIT% before non-recurring items) to be around 11%.

Market Outlook

The general economic uncertainty and the slow global growth projections are expected to continue to impact power generation markets. It is expected that the overall market for natural gas and liquid fuel based power generation in 2013 will be similar to that of 2012. In 2013 ordering activity is expected to remain centered 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.

Our outlook for the shipping and shipbuilding market in 2013 is cautious, although slightly better than in 2012. The contracting outlook remains challenging for certain ship types, such as bulk carriers, due to the remaining overcapacity. Overall, the contracting mix is expected to be in line with that seen in 2012, favouring offshore and specialised vessel segments. Interesting opportunities can be seen in environmental solutions and fuel efficient designs.

The overall service market outlook remains stable. The outlook for the Middle East and Asia continues to be slightly more positive, while Southern Europe is likely to present more challenging conditions in line with overall economic development. An increase in the installed power plants base, compared to the marine sector, provides a better outlook for services to the power segment. The outlook for services to the marine sector remains, however, stable and is supported by the continued positive outlook for the offshore sector.

LNG World News Staff, January 25, 2013

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