EMEA News
Wärtsilä Raises 2014 Profitability Outlook on Increased Order Intake
Finnish shipping manufacturer Wärtsilä Corporation has raised its 2014 full-year profitability outlook after reporting higher-than-expected order intake in the third quarter.
The company posted a 21 percent increase in order intake to €1.3 billion ($1.7 billion), seeing improved business in its power plants, gas handling systems and cruise vessel engines segments.
As a result, full-year profitability is expected to rise to between 11.5 and 12 percent, up from a previously predicted 11.5 percent.
"I am confident that the positive trend in order development will continue during the upcoming quarter," President and CEO Björn Rosengren.
"Third quarter net sales and profitability developed in line with our expectations."
Rosengren said that the beginnings of industry-wide adoption of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers had helped helped to boost orders, in addition to steady business in the cruise sector.
In the power generation business, activity levels for smaller orders had also increased, he said, which combined with two larger orders had propelled an order intake increase of 47 percent in the segment.
The company said however, that the tough market conditions which characterized the first three quarters of the year had still depressed the outlook, with much of the activity in the segment coming from emerging markets investing in power generation capacity.
Wärtsilä's underlying operating profit in the third quarter slightly missed analyst forecasts of €144 million ($182.9 million), coming in at €142 million ($180.3 million).
Net sales growth was also predicted to remain at 5 percent, and compared to this time last year, have dropped to €1.1 billion from €1.2 billion ($1.5 billion).
According to Reuters, the company is currently focusing on mergers and acquisitions.
"We have a strong balance sheet, good financials, and we have a lot of opportunities on the M&A side ... We have a lot of things ongoing and hopefully we can inform the market soon that something is happening on that side," Rosengren said.
Early this year, Wärtsilä cut 1,000 jobs, or 5 percent of its workforce, in an effort to remain profitable and competitive.
