Wärtsilä posts increased third quarter profit

Wartsila

Finnish engine manufacturer Wärtsilä saw third quarter earnings increase despite a fall in new orders.

The company’s net sales increased 9 percent to 1.22 billion euros, as compared to the same quarter in 2014, Wärtsilä said in its January-September report.

Its order intake decreased 17 percent to 1.08 billion euros in the third quarter of this year.

THIRD QUARTER HIGHLIGHTS

– Order intake decreased 17% to EUR 1,086 million (1,309)
– Net sales increased 9% to EUR 1,222 million (1,117)
– Book-to-bill 0.89 (1.17)
– EBITA EUR 170 million, or 13.9% of net sales (EUR 149 million or 13.3%)
– Operating result before non-recurring items EUR 160 million, or 13.1% of net sales (EUR 142 million or 12.7%)
– Earnings per share 0.49 euro (0.43)
– Cash flow from operating activities EUR -5 million (68)
– Mr Jaakko Eskola appointed President and CEO of Wärtsilä Corporation as of 1 November 2015

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-SEPTEMBER 2015

– Order intake was stable at EUR 3,529 million (3,562)
– Net sales increased 6% to EUR 3,439 million (3,230)
– Book-to-bill 1.03 (1.10)
– EBITA EUR 420 million, or 12.2% of net sales (EUR 392 million or 12.1%)
– Operating result before non-recurring items EUR 397 million, or 11.5% of net sales (EUR 373 million or 11.5%)
– Earnings per share 1.46 euro (1.16)
– Cash flow from operating activities EUR 78 million (240)
– Order book at the end of the period increased 9% to EUR 5,112 million (4,674)

WÄRTSILÄ’S PROSPECTS FOR 2015 UNCHANGED

Wärtsilä expects its net sales for 2015 to grow by 5-10% and its operational profitability (EBIT% before non-recurring items) to be 12.0-12.5%. This guidance includes the impact of the L-3 Marine Systems International (MSI) acquisition. MSI is expected to contribute approximately EUR 250 million to net sales and EUR 9 million to the operating result during 2015. Excluding purchase price allocation amortisation, MSI’s operating result is estimated to reach EUR 16 million.

BJÖRN ROSENGREN, PRESIDENT AND CEO

“Net sales increased by 9% to EUR 1,222 million in the third quarter, supported by growth in aftermarket activities and by the contribution from L-3 Marine Systems International. Good development within Services contributed to profitability, which reached 13.1%. We are well on track to reach our guidance for sales and profitability development this year.

Competition in the power generation markets is increasing, and the current macroeconomic uncertainty continues to cause delays in customer decision-making. Nevertheless, the project pipeline is solid and we continue to see opportunities for improved activity in the upcoming quarter. The Marine Solutions markets remain challenging. Low vessel contracting volumes, together with weak sentiment in the offshore segment, is impacting our order intake. I am pleased to note that our Services business is compensating well for the lower demand in our equipment markets. Improved maintenance demand from marine customers and stability within power plant service indicates a positive outlook for the rest of this year.

Wärtsilä’s mission is to shape the marine and energy markets with advanced technologies while focusing on lifecycle performance – our ambition level is high. We are well positioned to benefit from the ongoing fundamental changes in our end markets, and from the increasing demand for higher efficiency with fewer emissions. Furthermore, we have during the past few years initiated various measures to develop the efficiency and flexibility of our own operations. I am confident in Wärtsilä’s long-term opportunities for growth and improved profitability, and believe that Jaakko Eskola, with his strong and proven track record, is well suited to lead the company towards continued success. I would like to take this opportunity to thank our shareholders and the entire Wärtsilä organisation for the inspiring past four years.”

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