On October 29, Finnish maritime technology giant Wärtsilä released its interim report from January to September 2024.
Wärtsilä said its net profit was €144m ($156m), up from €82m a year ago, as revenue rose to revenue €1.72bn against €1.45bn. And highlights from July–September 2024 are below：
- Order intake remained stable at EUR 1,803 million (1,787), while the organic growth, which excludes FX impact and the impact of acquisitions and divestments, was 4%
- Service order intake increased by 4% to EUR 874 million (842)
- Net sales increased by 18% to EUR 1,718 million (1,452), while organic growth was 21%
- Book-to-bill amounted to 1.05 (1.23)
- The comparable operating result increased by 41% to EUR 177 million (125), which represents 10.3% of net sales (8.6)
- The operating result increased by 65% to EUR 192 million (117), which represents 11.2% of net sales (8.0)
- Earnings per share increased to 0.24 euro (0.14)
- Cash flow from operating activities increased to EUR 296 million (213)
Highlights from January–September 2024
- Order intake increased by 7% to EUR 5,580 million (5,214), while organic growth was 11%
- Service order intake increased by 6% to EUR 2,805 million (2,644)
- The order book at the end of the period increased by 15% to EUR 7,583 million (6,594)
- Net sales increased by 5% to EUR 4,595 million (4,371), while organic growth was 8%
Book-to-bill amounted to 1.21 (1.19) - The comparable operating result increased by 51% to EUR 485 million (320), which represents 10.5% of net sales (7.3)
- The operating result increased by EUR 213 million to EUR 487 million (274), which represents 10.6% of net sales (6.3)
- Earnings per share increased to 0.58 euro (0.28)
- Cash flow from operating activities increased to EUR 770 million (432)
WÄRTSILÄ’S PROSPECTS
Marine: Wärtsilä expects the demand environment for the next 12 months (Q4/2024-Q3/2025) to be better than that of the comparison period.
Energy: Wärtsilä expects the demand environment for the next 12 months (Q4/2024-Q3/2025) to be better than that of the comparison period.
Notably, in September, Wärtsilä announced being contracted to deliver four Wärtsilä 50SG engines to a new power plant for the Kentucky Municipal Energy Agency (KYMEA). The fast-starting engines will offer flexibility and a rapid response to fluctuations in the availability of wind and solar power, thereby protecting KYMEA’s members from electricity market price volatility.
The market sentiment for Wärtsilä was positive, with robust momentum in key customer segments for new vessels, while decarbonisation-related retrofits and longer trade routes supported the demand for services. Investments in new ships increased compared to last year with a positive trend in the interest for alternative fuels. In addition to LNG and methanol, ammonia has emerged as a promising alternative fuel as the shipping industry looks for more sustainable options. In August, Wärtsilä announced a landmark deal with Eidesvik to supply the equipment for the conversion of an offshore platform supply vessel to operate with ammonia fuel. The vessel, ‘Viking Energy’, is set to become the world’s first ammonia-fuelled in-service ship in 2026.
Another highlight of the quarter was the signing of a five-year Lifecycle Agreement with Royal Caribbean Group covering 37 cruise ships. Reaching the industry’s goal of net-zero operations requires installing the right technical solutions onboard, but it is also crucial to ensure these solutions perform optimally throughout their entire lifetime. Wärtsilä’s Lifecycle Agreements provide this assurance and highlight the importance of collaboration in addressing the industry’s goals.
Wärtsilä’s order intake in the third quarter increased organically by 4%. Service order intake increased driven by good activity levels in Marine. Equipment order intake decreased slightly overall but grew clearly in Engine Power Plants. Equipment orders were lower in Marine, due to a strong comparison period, as well as in Energy Storage & Optimisation where some project closings were deferred to later quarters. The average size of projects in Energy Storage & Optimisation has increased, which has contributed to the lumpiness of the business. Overall, we continue to see growing demand for Energy Storage & Optimisation solutions.
Net sales in the third quarter increased organically by 21%, with growth in both equipment and service. As we have previously communicated, equipment deliveries especially in Energy are tilted towards the second half of the year in 2024. This had a positive impact on equipment net sales in the third quarter. In Marine, the lead times from equipment order intake to net sales are slightly longer, due to the remaining constraints in shipyard capacity and longer shipyard orderbooks.
The comparable operating result increased by 41% to EUR 177 million with a comparable operating margin of 10.3%. The comparable operating result increased in all three businesses. During recent years, Wärtsilä’s comparable operating margin percentage has typically reached its high in the fourth quarter of each year. In 2024, we do not expect to see that normal seasonality, given the mix impact from increasing equipment deliveries. However, this is dependent on the volume of equipment deliveries that will be realised in the fourth quarter.
Cash flow from operating activities ended strong and significantly improved to EUR 296 million during the third quarter. The improvement in cash flow was driven mainly by a better operating result. It is important to note that the current negative working capital levels are unusual for our business, and we expect them to normalise going forward. Still, our active work on all elements of working capital has continued and has supported us in keeping working capital at a clearly lower level than the long-term historical average.