Impacted by pandemic, Wärtsilä expects 2020 sales to take 10% hit

Details: Created on Friday, 23 October 2020 14:59; Written by Marinelog.com

October 23, 2020
News

Wärtsilä President & CEO Jaakko Eskola: "Our near-term focus will be on ensuring both a sound financial position and an optimal cost structure for the prevailing market conditions,"

Releasing its interim report for the January-September 2020 period, Wärtsilä Corporation says it expects the near-term demand in the marine and energy markets to improve from current levels. However, based on its current order book, the corporation expects net sales for 2020 to decline by approximately 10% (EUR 5,170 million -about $6,117 million- in 2019).

Profitability is expected to continue to be burdened by the effects of COVID-19 and, while service demand is anticipated to improve, the seasonal pick-up is unlikely to be as strong as in previous years.

HIGHLIGHTS OF JULY–SEPTEMBER 2020

Order intake was stable at EUR 981 million (979)
Net sales decreased by 11% to EUR 995 million (1,118)
Book-to-bill amounted to 0.99 (0.88)
Comparable operating result increased by 55% to EUR 61 million (39), which represents 6.1% of net sales (3.5)
Earnings per share increased to 0.04 euro (-0.01)
Cash flow from operating activities increased to EUR 114 million (-61)

HIGHLIGHTS OF JANUARY–SEPTEMBER 2020

Order intake decreased by 14% to EUR 3,240 million (3,772)
Order book at the end of the period decreased by 12% to EUR 5,265 million (5,982)
Net sales decreased by 3% to EUR 3,385 million (3,486)
Book-to-bill amounted to 0.96 (1.08)
Comparable operating result decreased by 32% to EUR 172 million (254), which represents 5.1% of net sales (7.3)
Earnings per share decreased to 0.13 euro (0.20)
Cash flow from operating activities increased to EUR 407 million (-63)

COVID-19 LIMITS APPETITE FOR MARINE AND ENERGY INVESTMENT

“The COVID-19 pandemic continued to limit the appetite for investments in both the marine and energy markets in the third quarter, resulting in depressed vessel contracting and the postponement of decisions on new power plant capacity,” said President & CEO Jaakko Eskola. “Furthermore, despite some easing of mobility restrictions, low vessel utilization, power plant site access constraints, and customers’ focus on conserving cash led to soft demand for services.”

Looking ahead, Eskola said that visibility into demand development remains low, due to widespread concerns over escalating virus infection rates and the longer-term implications of the COVID-19 pandemic.

“Our near-term focus will be on ensuring both a sound financial position and an optimal cost structure for the prevailing market conditions,” he said. “Simultaneously, we will continue to invest in developing our digital offering and fuel flexible solutions, enabling us to capture future growth opportunities related to the decarbonization and transformation of the marine and energy industries.”