Wärtsilä posted a first-quarter loss, hit by restructuring charges, but said it expected full-year results at its key power divisions to reach last year's level. Wärtsilä reported a January-March loss before extraordinary items of $3.92 million versus a profit a year ago. The result sent Wärtsilä's shares 5.2 percent lower to 23.60 euros in thin opening trade on a flat Helsinki bourse. The stock is eight percent below its year high of 25.65 euros. Wärtsilä booked a 30-million-euro restructuring provision to improve operations at its engine-building divisions, but said it would absorb that charge in the rest of the year, leaving operating results for the divisions on par with 2000. Despite the first-quarter loss, Chief Executive Ole Johansson said
the performance of ongoing operations had improved, and steps, including job cuts, were being taken to continue boosting efficiency at the core divisions.
"We will be able to absorb the 30-million-euro provision in our full-year profit, so in that respect the market should not be disappointed," Johansson said. "If you look at the power divisions' operating profit margin, before this provision we have an EBIT margin of 4.7 percent, which is better than we had on average last year," he said.
In 2000 the power divisions, which accounted for 92 percent of net sales of ongoing operations, had a full-year operating profit margin of 3.8 percent of net sales.
Given the good order book, the growing service business, and the currently favorable outlook, net sales of the power divisions in 2001 will increase. But Johansson said that the outlook for Wärtsilä's Imatra Steel division, which makes specialty steels, was more uncertain due to weak prices.
Johansson: Marine Business Will Be Strong
's Wartsila is optimistic about the outlook for its key marine engine and distributed power business, the group's head said after the company posted a three-month loss due to restructuring charges. "I'm pretty optimistic about the situation in the marine market -- shipbuilding orderbooks have continued to increase over the past months, and this is of course good news for us in the long term," Chief Executive Ole Johansson said.
"I am also optimistic about the distributed power generation business, and especially about the developments in North and South America," Johansson said, noting that the share of gas power plants in Wartsila's business portfolio had grown. - (Reuters)