Wärtsilä Q2 Profit Falls 3% and is Below Forecast

by Ship & Bunker News Team
Thursday July 19, 2012

Finnish ship and power plant engine manufacturer Wärtsilä Corporation has announced its second quarter operating profit fell 3% to €113 million ($92 million) compared to the same period in 2011, and was less than a Reuters poll of analysts forecast of €120 million ($98 million).

According to Wärtsilä, sales were only slightly weaker than expected with order intake growing 2% to €1.2 billion ($980 million).

Wärtsilä said Q2, 2012 activity level in the offshore and specialised vessel markets was "considerably lower" than 2011 when contracting volume was 353 vessels in the second quarter compared to 238 new vessels in Q2, 2012.

According to the report, the decrease in activity was attributable to continued challenging market conditions for bulkers, tankers and container vessels where owners are experiencing ongoing pressure from low earnings, high operating expenses, high fuel costs and well as problems obtaining financing.

Wärtsilä's outlook for overall vessel contracting activity during 2012 is slightly negative, driven by low contracting levels in traditional merchant segments, with full year contracting expected to be somewhat lower than 2011.

Vessel contracting was not the only poor performing sector, with order intake for power plants in the second quarter decreasing 33% from the same period in 2011. 

Commenting on the quarter, President and CEO Björn Rosengren said, "I am pleased with the good development within Ship Power's specialised vessel segments," adding that "Ship Power also received interesting pump, gas and environmental system orders."

"We do not give quarterly guidance. But I would like to say this much: You will probably see Q3 a little bit weak, and then a stronger Q4," Rosengren was quoted saying at a news conference.

Wärtsilä today announced that it will supply main fuel and energy efficient engines for four VLCCs, one Aframax tanker and four medium range tankers for  Kuwait Oil Tanker.