Offshore buoys Wärtsilä order intake

Bjoern RosengenOCTOBER 17, 2012 — "Despite the continuing uncertainty in the global economy and the tough market conditions, both our order intake and net sales developed well," says Wärtsilä Corporation President and CEO Björn Rosengren, commenting on the corporations interim report for January - September 2012.

"In the third quarter they were up by 14 percent and 28 percent respectively," he continued. "Ship Power's year-on-year performance is strong, and has been supported by both an active offshore sector and the Hamworthy acquisition. Among the highlights are a major engine and propulsion equipment order for six Brazilian drillships from Jurong Shipyard Pte Ltd, and three platform supply vessel related orders from Statoil, as well as the first four ballast water management system orders. Wärtsilä again received a record power plant order, this time for an approximately 600 MW power plant to be constructed in Jordan. It will be the world's largest tri-fuel power plant. I am also happy to note that the growth trend for Services continues, regardless of the difficult market environment that many of our marine service customers are experiencing."

"We believe that net sales will grow this year by around 10-15 percent, which is more than originally estimated," said Mr. Rosengren. "Our profitability now stands at 10.3 percent and we believe it will improve in the fourth quarter. As a result, we expect profitability for the full year to be 10.5-11 percent."


Offshore and specialized vessels activity continues to stand out.

During the third quarter of 2012, 229 contracts for new vessels were registered. Since the beginning of 2012, 761 vessels have thus far been contracted globally. This activity level is considerably lower than in 2011, when the average quarterly contracting volume was 353 vessels. The decrease in activity is a reflection of the continuing tough market conditions for the traditional merchant segments, i.e. bulkers, tankers and container vessels. In these segments owners are experiencing severe pressure resulting from low earnings and high operating expenses, including high fuel costs, as well as difficulties in accessing financing.

Contracting activity has, however, been robust for the offshore and specialized vessel markets during 2012, with offshore accounting for a notable 30 percent of all contracting, as measured in the number of vessels. The gas carrier market (LNG carriers and LPG carriers) has also been active with respectively 21 and 43 contracts booked this year to date. There has also been good contracting activity in the ferry segment.

China and South Korea continued to be the dominant countries in shipbuilding, capturing respectively 36 percent and 35 percent of the contracts confirmed in 2012 in terms of gross tonnage. China closed the gap on South Korea as Chinese yards diversify their product mix and are moving into the offshore segment, in particular offshore support vessels. Non-traditional shipbuilding countries are emerging with 17 percent of the contracts confirmed. Brazil, Norway, the U.S.A. and Turkey stand out amongst the small shipbuilding nations that have been capturing newbuilding contracts during 2012.

Ship Power market shares

Wärtsilä's share of the medium-speed main engine market was 48 percent (49 percent at the end of the previous quarter). The market share in low-speed engines decreased to 18 percent (22 percent). In the auxiliary engine market, Wärtsilä's share remained at 5 percent.


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