Wärtsilä Reports 1Q Results

Wärtsilä's reported that net sales for the first quarter increased 17 percent to EUR 580.9 (497.4) million, despite a weakening of the global marine market and nearly non-existent containership business. After the close of the period Wärtsilä paid approximately EUR 350 million for the acquisition of John Crane-Lips.

Marine

The weak global economic conditions affected Wärtsilä's order intake during the first months of the year. However, project activity in all important vessel segments was lively compared to the quiet final quarter in 2001. Demand was most active for tankers and bulk carriers. The containership market has all but halted. John Crane-Lips became part of Wärtsilä on April 15, 2002. The acquisition marked a milestone for Wärtsilä's strategy to be the global ship power supplier. John Crane-Lips, now renamed Wärtsilä Propulsion, will be consolidated within Wärtsilä Marine from April 1. The company gained a significant order for dual-fuel engines in April. Wärtsilä 50DF engines will be supplied to an LNG carrier ordered by Gaz de France. The vessel is the first in the world to deploy a propulsion system based on diesel technology.

Service

Net sales of the Service division grew 9.5% to EUR 199.2 million. The volume of service and operations agreements now covers more than 10,500 MW of Wärtsilä's active engine base (9,177 MW). The volume of O&M agreements continues to increase rapidly. Major markets in this respect were India, Saudi-Arabia and the USA. Wärtsilä will acquire the engine repair and reconditioning business from Metalock Singapore Ltd. The operation to be acquired, with annual net sales of approx. EUR 9 million, further strengthens Wärtsilä's position as the total service provider. The transaction is subject to regulatory approvals, which are expected in May 2002.

Future

The company believes that the John Crane-Lips acquisition offers good opportunities to develop and expand Wärtsilä's The Ship Power Supplier concept. The general market uncertainty makes it difficult to assess the future order intake but activity is expected to become more lively during the year.