Wärtsilä CEO: Order intake 'Stable', but COVID Impact still a 'Burden'

MarineLink April 22, 2021

Hakan Agnevall, Wärtsilä President and CEO. ©2021 Wärtsilä Corporation

In announcing its 2021 Q1 interim financials, Wärtsilä said that while order intake is stable, COVID-19 continues to burden net sales and profitability. Looking ahead, while it sees near-term demand as "somewhat better", it noted that visibility "remains limited" and prevailing market conditions "make the outlook uncertain."

Highlights of the January to March 2021 period include:

Order intake was stable at EUR 1,244 million (1,247)
Order book at the end of the period decreased by 6% to EUR 5,399 million (5,745)
Net sales decreased by 19% to EUR 946 million (1,170)
Book-to-bill amounted to 1.32 (1.07)
Comparable operating result decreased by 28% to EUR 41 million (56), which represents 4.3% of net sales (4.8). This includes
Approximately EUR 20 million net provisions arising from a detailed project risk review in Wärtsilä Energy.
Operating result decreased by 30% to EUR 36 million (52), which represents 3.8% of net sales (4.5)
Earnings per share decreased to 0.04 euro (0.05)
Cash flow from operating activities increased to EUR 67 million (42)

“During the first quarter of 2021, the prolonged COVID-19 pandemic continued to pose challenges to our business operations, our people, and our financial performance," said Hakan Agnevall, Wärtsilä President and CEO. "The cruise industry remained depressed, customers held up investments in new power plant capacity, deliveries were delayed, and profitability remained low due to cost inflation and fixed cost under absorption. However, there were signs of stabilization and recovery. Vessel ordering activity in general improved, and the demand for services and energy storage solutions was at a good level. As a result, our order intake remained stable compared to the first quarter of 2020, despite the pandemic having a larger impact during the first quarter of 2021."

He noted that the continued roll-out of vaccination programs made the company "cautiously optimistic about further recovery in the marine markets" while recovery in energy markets is expected to take longer.

Despite uncertainties, research and development activities remain at speed, and he notes "we have several exciting R&D and strategic projects ongoing, both in-house and together with our partners. These are aimed at accelerating the decarbonization of the energy and marine industries."

One such project is a "strategic partnership with Ocean Technologies Group to enhance safety and efficiency in the maritime sector by combining on-demand digital training, virtual and simulation events via cloud-based solutions, and in-person learning experiences."