Wärtsilä Order Intake Up, Net Sales Down

Wärtsilä Corporation releases its January to March 2013 interim financial report.

Highlights of the Review Period January-March 2013
- Order intake increased 22% to EUR 1,352 million (1,109)
- Net sales decreased 12% to EUR 882 million (1,005)
- Book-to-bill 1.53 (1.10)
- Operating result EUR 70 million, or 8.0% of net sales (EUR 102 million or 10.1%)
- EBITA EUR 79 million or 8.9% of net sales (EUR 109 million or 10.9%)
- Earnings per share 0.37 euro (0.33)
- Cash flow from operating activities EUR 84 million (28)
- Order book at the end of the period increased by 13% to EUR 4,998 million (4,409)

Björn Rosengren, President and EO
"The beginning of 2013 developed according to our expectations. Order intake grew by 22%, thanks to good development in both Power Plants and Ship Power, especially in the offshore segment. First quarter net sales and profitability were impacted by the anticipated low level of deliveries, mainly due to timing of projects. Interest in natural gas based power generation continued and Power Plants received significant orders from Jordan and USA.

In Ship Power, the offshore and specialised vessel markets remained robust. Strategically important orders were received for exhaust gas cleaning systems, and for comprehensive solutions packages from the offshore industry. There is continued interest in service agreements in the marine industry, as evidenced by the maintenance agreement signed for 'Viking Grace', the largest passenger ferry ever to operate on liquefied natural gas. Supported by our solid order book and the stable Services business, our prospects for 2013 remain unchanged."

Market Outlook
The general macroeconomic uncertainty and the slow global growth projections are expected to continue to impact the global 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 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.

Our 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. Current emission regulations create interesting opportunities for environmental solutions. The contracting mix is expected to be in line with that seen in 2012, favouring contracting in the offshore and specialised 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.
 
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.

Wärtsilä's Prospects For 2013 Unchanged
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%.