Wartsila Sees Low Oil Price Impacting Shipping

CEO cautious on 2015 outlook.

Finnish ship engine and power plant maker Wartsila reported a smaller-than-expected quarterly profit and warned lower crude prices were likely to curb oil firms' demand for vessels.

Shares in Wartsila dropped 2.1 percent to 40.15 euros by 0941 GMT after it said fourth-quarter adjusted operating profit fell 7 percent year-on-year to 196 million euros ($222 million), below analysts' mean forecast of 209 million in a Reuters poll.

Chief executive Bjorn Rosengren said the market outlook was uncertain.

"We are taking a cautious look forward ... With the low oil price, it's easy to anticipate that it will have some kind of effect on our offshore business," he told Reuters.

For this year, Wartsila forecast its results would hold up on orders it has already won, expecting comparable sales growth of 0-10 percent and a core operating profit margin 12.0-12.5 percent, compared with 11.9 percent in 2014.

"Wartsila has given its guidance for this year but the order book will show what happens after that," Handelsbanken analyst Tom Skogman said.

New orders for the ship power unit fell 2 percent year-on-year in the fourth quarter, while overall orders were up 14 percent on the back of growth in power plant and service deals.

In 2014, 36 percent of Wartsila's sales came from its ship engine unit, while 24 percent came from power plants and 41 percent from services.

Rosengren said Wartsila was eyeing more acquisitions after agreeing to buy L-3 Marine Systems for 285 million euros last year.

"We announced the L-3 deal and we have more ambitions going forward. .. We have a strong balance sheet, there's room for a lot."

Reporting by Jussi Rosendahl and Anna Ercanbrack