Wartsila Corporation publishes interim report
OLE JOHANSSON, PRESIDENT AND CEO: “Wärtsilä’s net sales were at a good level EUR 1,167 million and profitability developed according to plan. Challenges in securing financing continued to impact the ordering activity in Power Plants. Looking ahead, the global need for flexible and environmentally sound power generation and the quest for increased efficiency and better energy security will clearly work in Wärtsilä’s favour. Services continued its stable development, with the extensive installed base of Wärtsilä equipment and increasing number of operations & management agreements creating a solid demand base. The marine market continued to be challenging due to the large number of ships under construction, and Ship Power orders remained at a low level. Wärtsilä’s activity in many segments of shipping is valuable as the weakness in some segments is likely to continue at least another two years. Once the broader recovery commences, the Asian shipbuilding market will emerge stronger than earlier. These shifts in the market require structural re-evaluation. Wärtsilä is preparing to optimise its production to meet the changing business environment.”
MARKET DEVELOPMENT
SHIP POWER
The ship contracting is currently substantially below the high levels of the past years. Despite the signs of recovery indicated by the fundamentals in the world economy, the shipping industry still faces problems with over supply within the major vessel segments. The market activity seen during the recent months has mainly been re-negotiations of existing orders.
There have been postponements in the deliveries of existing vessel orders during the review period. The cancellation rate will probably not reach the level estimated at the beginning of the year but the market will still see considerable rescheduling of orders.
Ship Power market shares
Wärtsilä’s market share in medium speed main engines decreased from 40% at the end of the previous quarter to 31%. The company’s market share in low speed main engines increased slightly to 13% (11). In auxiliary engines the market shares dropped to 4% (6). Market shares have become more sensitive to individual orders since the total contracting volume is low.
SERVICES
In the marine industry, the imbalance between vessel capacity and vessel demand prevailed and continued impacting the marine services. During the review period slow development was seen in Asia where capacity adaption through the lay-up of vessels continued. In the power plant services sector several projects are under development in the fields of environmental upgrades and fuel conversions.
Wärtsilä’s installed engine base in the Ship Power and Power Plant markets totals over 160,000 MW and consists of thousands of installations distributed throughout the world. Both end markets consist of several customer segments for Services, and Wärtsilä’s portfolio is the broadest in the market. These factors limit the impacts of fluctuations in any individual market or customer segment.
ORDER INTAKE
The Group order intake for the third quarter totalled EUR 725 million (1,382), a decrease of 48%.
The order intake for Ship Power totalled EUR 68 million (450), 85% below the corresponding period last year. During the quarter Wärtsilä Ship Power booked orders in the Merchant and the Offshore segments, 49% and 3% of the total order intake respectively. Navy orders represented 7% whereas Cruise&Ferry was 18%, Special vessels 17% and Ship design 6%. The third quarter order intake remained at the same level as in the second quarter of 2009 (EUR 67 million in the second quarter of 2009). For the review period January-September 2009 Ship Power’s order intake was EUR 262 million (1,674), a decrease of 84% from the corresponding period last year.
In the Power Plants business the continuing challenges in financing for large projects resulted in lower than expected order intake for the third quarter 2009. The order intake totalled EUR 170 million (498), 66 % lower than the corresponding period last year. The order intake was 34% lower than in the previous quarter. Small and medium size projects for the industrial power generation segment were the major contributors to the third quarter order intake. Orders were received in among other Papua New Guinea, Turkey, Italy and Greenland. For the review period January-September 2009 Power Plants’ order intake totalled EUR 748 million (1,620), a 54% decrease compared to corresponding period last year.
Order intake for the Services business totalled EUR 483 million (434) in the third quarter, a growth of 11% compared to the corresponding period 2008. Compared to the second quarter, order intake grew by 5% (EUR 458 million in the second quarter of 2009). Wärtsilä signed O&M contracts for three power plants in Brazil, as well as two in Pakistan. Services’ order intake for the review period January-September totalled EUR 1,448 million (1,448).
For the review period January-September 2009 Wärtsilä’s total order intake amounted to EUR 2,468 million (4,750), which represents a reduction of 48% compared to the corresponding period 2008.
ORDER BOOK
At the end of the review period Wärtsilä’s total order book stood at EUR 5,351 million (7,762), a decrease of 31%.
The Ship Power order book stood at EUR 3,230 million (5,010), -36%. During the review period January-September 2009, cancellations of EUR 279 million materialised and were deducted from the order book. The cancellations were mainly within the Merchant and Offshore segments. Wärtsilä sees a cancellation risk of approximately EUR 650 million (EUR 800 million at the end of the previous quarter).
At the end of the review period the Power Plants order book amounted to EUR 1,549 million (2,243), which is 31% lower than at the same date last year.
The Services order book totalled EUR 571 million (505) at the end of the review period, an increase of 13%.
NET SALES
During the third quarter, Wärtsilä’s net sales increased by 2% to EUR 1,167 million (1,140) compared to the corresponding period last year. Net sales for Ship Power totalled EUR 378 million (344), a growth of 10%. Power Plants’ net sales for the third quarter totalled 360 million (349), +3%. The third quarter net sales for Services amounted to EUR 424 million (452), -6%.
Wärtsilä’s net sales for January-September 2009 grew by 21% and totalled EUR 3,741 million (3,082). Ship Power’s net sales grew 29% to EUR 1,230 million (952). Net Sales for Power Plants totalled EUR 1,169 million (797), a growth of 47%. Net sales from the Services business remained stable and on a good level amounting to EUR 1,326 million (1,335). Net sales were evenly distributed between the businesses during the review period January-September 2009. Ship Power accounted for 33%, Power Plants for 31% and Services for 35% of the total net sales.
FINANCIAL RESULTS
The third quarter operating result was EUR 133 million (123), 11.4% of net sales (10.8). For the review period January-September 2009, the operating result before nonrecurring expenses rose to EUR 419 million (328), 11.2% of net sales (10.6). Wärtsilä recognised EUR 6 million of nonrecurring expenses related to the adjustment measures taken within the Ship Power business in the second quarter.
Financial items amounted to EUR -25 million (5). Net interest totalled EUR -14 million (-10). Dividends received totalled EUR 5 million (6). Profit before taxes amounted to EUR 388 million (333). Taxes in the reporting period amounted to EUR 111 million (91). Earnings per share were EUR 2.77 (2.42).
BALANCE SHEET, FINANCING AND CASH FLOW
Wärtsilä’s third quarter cash flow from operating activities totalled EUR 214 million (49). For January-September 2009 the cash flow from operating activities was EUR 142 million (255). Net working capital decreased by EUR 80 million during the third quarter, the main reason being the favourable development of receivables. Advances received decreased by EUR 104 million during the quarter. Net working capital at the end of the period totalled EUR 511 million (102). Advances received at the end of the period totalled EUR 1,039 million (1,375). Net working capital has been exceptionally low in 2007 and 2008 due to the high amount of advances received. Liquid reserves at the end of the period amounted to EUR 262 million (158).
Net interest-bearing loan capital totalled EUR 575 million (369). Wärtsilä had interest bearing loans totalling EUR 852 million (539) at the end of September 2009. The existing funding programmes include long term loans EUR 622 million, Committed Revolving Credit Facilities totalling EUR 530 million and Finnish Commercial Paper programmes totalling EUR 700 million. At the end of the period non-utilised committed credit facilities totalled EUR 530 million. In addition Wärtsilä has agreed on a EUR 30 million long-term loan that will be disbursed in November 2009. The total amount of short-term debt maturing within the next 12 months is EUR 230 million.
The solvency ratio was 35.4% (34.7) and gearing was 0.43 (0.34).
HOLDINGS
Wärtsilä owns 7,270,350 B shares in Assa Abloy, or 2.0% of the total. This holding has been booked in the balance sheet at its market value at the end of the reporting period, EUR 81 million.
CAPITAL EXPENDITURE
Gross capital expenditure in the review period totalled EUR 98 million (272), which comprised EUR 15 million (162) in acquisitions and investments in securities, and EUR 82 million (110) in production and information technology investments. Depreciation for the review period amounted to EUR 91 million (68).
Capital expenditure for 2009 will be brought down from the previously indicated level of EUR 180 million excluding acquisitions to approximately EUR 160 million including acquisitions (EUR 366 million in 2008).
STRATEGIC ACQUISITIONS, JOINT VENTURES AND EXPANSION OF THE NETWORK
Wärtsilä continued pursuing its strategy of expanding its network with new service facilities in amongst others Ukraine, Cameroon, Hungary, Chile and Dubai. The facilities provide a good base for future service growth and expanding the network will remain one of Wärtsilä’s strategic focus areas also in the future.
In May, Wärtsilä acquired 60% of the shares of Wärtsilä Navim Diesel of Italy, thus increasing its ownership of the company to 100%. Wärtsilä Navim Diesel, which specialises in marine sales and service, has a strong market position, particularly in the Cruise & Ferry segment. The transaction resulted in EUR 8 million of new goodwill.
MANUFACTURING
The Ship Power market has substantially weakened since the economic crisis began and the market shift to Asia continues stronger than ever. As a consequence, Wärtsilä is in the process of analysing its manufacturing footprint. Various alternatives are being evaluated for adjusting to these changes in the market. The analysis will comprise all manufacturing units with the major focus being on capacity adjustments in Europe. The impact on different units will be specified during the fourth quarter of 2009 and the first quarter of 2010. Wärtsilä has manufacturing units in Finland, Italy, the Netherlands, Norway, Spain, the United Kingdom, China, India, Japan and Korea.
RESEARCH & DEVELOPMENT
After performing successfully in a series of tests, the Wärtsilä sulphur oxides (SOx) scrubber has been granted the Sulphur Emission Control Area (SECA) Compliance Certificate by the classification societies Det Norske Veritas and Germanischer Lloyd.
PERSONNEL
In May, Wärtsilä Ship Power announced that it had initiated the formal process to reduce 400-450 jobs. The negotiations were initiated to adjust to the substantially weakened global marine market situation. The annual savings from these measures will be approximately EUR 30 million. The effect of the savings will start to materialise gradually from the second half of 2009, and will take full effect by the end of 2010. In the second quarter Wärtsilä recognised EUR 6 million of nonrecurring expenses in its operating result related to the adjustment measures taken in the Ship Power business. Altogether, Wärtsilä Ship Power employs sales, project management, engineering services and ship design personnel in 30 countries.
Wärtsilä had 18,806 (18,268) employees at the end of September. The average number of personnel during January-September 2009 totalled 18,897 (17,386). Services had 11,318 employees (10,623), a growth of 7%. The growth is mainly due to the expansion of the network, recruitments in relation to new O&M contracts and the commissioning of Wärtsilä Ship Power’s and Power Plants’ all time high deliveries.
SUSTAINABLE DEVELOPMENT
In the third quarter Wärtsilä signed the United Nations Global Compact initiative and was registered as a participant by the UN Global Compact Office. With this action Wärtsilä further consolidates its commitment to sustainable business practices, and to the compact’s underlying principles in the areas of human rights, labour, the environment and anti-corruption.
CHANGES IN MANAGEMENT
The following appointments have been made to Wärtsilä Corporation’s Board of Management, with effect from 1 August 2009:
Christoph Vitzthum (40) MSc (Econ.) has been appointed Group Vice President, Services.
Vesa Riihimäki (43) MSc (Eng.) has been appointed Group Vice President, Power Plants and a member of the Board of Management.
DECISIONS TAKEN BY THE ANNUAL GENERAL MEETING
Wärtsilä’s Annual General Meeting held on 11 March 2009 approved the financial statements and discharged the members of the Board of Directors and the company’s President & CEO from liability for the financial year 2008. The Meeting approved the Board of Directors’ proposal to pay a dividend of EUR 1.50 per share totalling EUR 148 million. Dividends were paid on 23 March 2009.
The Annual General Meeting decided that the Board of Directors shall have six members. The following were elected to the Board: Ms Maarit Aarni-Sirviö, Mr Kaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr Antti Lagerroos, Mr Bertel Langenskiöld and Mr Matti Vuoria.
The firm of authorised public accountants KPMG Oy Ab, was appointed as the company’s auditors.
MARKET OUTLOOK
Maritime freight rates are still on low levels. The lower new building prices have attracted some owners to contract new vessels. The overall situation is still challenging and it is difficult to judge which direction the markets will take next. Wärtsilä’s activity in many segments of shipping is valuable as the weakness in some segments is likely to continue at least another two years.
Wärtsilä Power Plants estimates to see improved order intake levels along with the financing sector recovery and remains in a good position to maintain its market shares.
Services continues stable and the large installed base, extensive network, as well as the need for environmental upgrades provide a solid market base.
WÄRTSILÄ’S PROSPECTS FOR 2009 REITERATED
Despite the risk of cancellations and the nonrecurring restructuring items booked in the second quarter, the order book for 2009 should support a 10-20 percent growth in net sales for 2009, which would maintain profitability at last year’s good level.
WÄRTSILÄ INTERIM REPORT JANUARY - SEPTEMBER 2009
This interim financial report is prepared in accordance with IAS 34 (Interim Financial Reporting) using the same accounting policies and methods of computation as in the annual financial statements for 2008. All figures in the accounts have been rounded and consequently the sum of individual figures can deviate from the presented sum figure.
Use of estimates
The preparation of the financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the valuation of the reported assets and liabilities and other information, such as contingent liabilities and the recognition of income and expenses in the income statement. Although the estimates are based on the management’s best knowledge of current events and actions, actual results may differ from the estimates.
MARKET DEVELOPMENT
SHIP POWER
The ship contracting is currently substantially below the high levels of the past years. Despite the signs of recovery indicated by the fundamentals in the world economy, the shipping industry still faces problems with over supply within the major vessel segments. The market activity seen during the recent months has mainly been re-negotiations of existing orders.
There have been postponements in the deliveries of existing vessel orders during the review period. The cancellation rate will probably not reach the level estimated at the beginning of the year but the market will still see considerable rescheduling of orders.
Ship Power market shares
Wärtsilä’s market share in medium speed main engines decreased from 40% at the end of the previous quarter to 31%. The company’s market share in low speed main engines increased slightly to 13% (11). In auxiliary engines the market shares dropped to 4% (6). Market shares have become more sensitive to individual orders since the total contracting volume is low.
SERVICES
In the marine industry, the imbalance between vessel capacity and vessel demand prevailed and continued impacting the marine services. During the review period slow development was seen in Asia where capacity adaption through the lay-up of vessels continued. In the power plant services sector several projects are under development in the fields of environmental upgrades and fuel conversions.
Wärtsilä’s installed engine base in the Ship Power and Power Plant markets totals over 160,000 MW and consists of thousands of installations distributed throughout the world. Both end markets consist of several customer segments for Services, and Wärtsilä’s portfolio is the broadest in the market. These factors limit the impacts of fluctuations in any individual market or customer segment.
ORDER INTAKE
The Group order intake for the third quarter totalled EUR 725 million (1,382), a decrease of 48%.
The order intake for Ship Power totalled EUR 68 million (450), 85% below the corresponding period last year. During the quarter Wärtsilä Ship Power booked orders in the Merchant and the Offshore segments, 49% and 3% of the total order intake respectively. Navy orders represented 7% whereas Cruise&Ferry was 18%, Special vessels 17% and Ship design 6%. The third quarter order intake remained at the same level as in the second quarter of 2009 (EUR 67 million in the second quarter of 2009). For the review period January-September 2009 Ship Power’s order intake was EUR 262 million (1,674), a decrease of 84% from the corresponding period last year.
In the Power Plants business the continuing challenges in financing for large projects resulted in lower than expected order intake for the third quarter 2009. The order intake totalled EUR 170 million (498), 66 % lower than the corresponding period last year. The order intake was 34% lower than in the previous quarter. Small and medium size projects for the industrial power generation segment were the major contributors to the third quarter order intake. Orders were received in among other Papua New Guinea, Turkey, Italy and Greenland. For the review period January-September 2009 Power Plants’ order intake totalled EUR 748 million (1,620), a 54% decrease compared to corresponding period last year.
Order intake for the Services business totalled EUR 483 million (434) in the third quarter, a growth of 11% compared to the corresponding period 2008. Compared to the second quarter, order intake grew by 5% (EUR 458 million in the second quarter of 2009). Wärtsilä signed O&M contracts for three power plants in Brazil, as well as two in Pakistan. Services’ order intake for the review period January-September totalled EUR 1,448 million (1,448).
For the review period January-September 2009 Wärtsilä’s total order intake amounted to EUR 2,468 million (4,750), which represents a reduction of 48% compared to the corresponding period 2008.
ORDER BOOK
At the end of the review period Wärtsilä’s total order book stood at EUR 5,351 million (7,762), a decrease of 31%.
The Ship Power order book stood at EUR 3,230 million (5,010), -36%. During the review period January-September 2009, cancellations of EUR 279 million materialised and were deducted from the order book. The cancellations were mainly within the Merchant and Offshore segments. Wärtsilä sees a cancellation risk of approximately EUR 650 million (EUR 800 million at the end of the previous quarter).
At the end of the review period the Power Plants order book amounted to EUR 1,549 million (2,243), which is 31% lower than at the same date last year.
The Services order book totalled EUR 571 million (505) at the end of the review period, an increase of 13%.
NET SALES
During the third quarter, Wärtsilä’s net sales increased by 2% to EUR 1,167 million (1,140) compared to the corresponding period last year. Net sales for Ship Power totalled EUR 378 million (344), a growth of 10%. Power Plants’ net sales for the third quarter totalled 360 million (349), +3%. The third quarter net sales for Services amounted to EUR 424 million (452), -6%.
Wärtsilä’s net sales for January-September 2009 grew by 21% and totalled EUR 3,741 million (3,082). Ship Power’s net sales grew 29% to EUR 1,230 million (952). Net Sales for Power Plants totalled EUR 1,169 million (797), a growth of 47%. Net sales from the Services business remained stable and on a good level amounting to EUR 1,326 million (1,335). Net sales were evenly distributed between the businesses during the review period January-September 2009. Ship Power accounted for 33%, Power Plants for 31% and Services for 35% of the total net sales.
FINANCIAL RESULTS
The third quarter operating result was EUR 133 million (123), 11.4% of net sales (10.8). For the review period January-September 2009, the operating result before nonrecurring expenses rose to EUR 419 million (328), 11.2% of net sales (10.6). Wärtsilä recognised EUR 6 million of nonrecurring expenses related to the adjustment measures taken within the Ship Power business in the second quarter.
Financial items amounted to EUR -25 million (5). Net interest totalled EUR -14 million (-10). Dividends received totalled EUR 5 million (6). Profit before taxes amounted to EUR 388 million (333). Taxes in the reporting period amounted to EUR 111 million (91). Earnings per share were EUR 2.77 (2.42).
BALANCE SHEET, FINANCING AND CASH FLOW
Wärtsilä’s third quarter cash flow from operating activities totalled EUR 214 million (49). For January-September 2009 the cash flow from operating activities was EUR 142 million (255). Net working capital decreased by EUR 80 million during the third quarter, the main reason being the favourable development of receivables. Advances received decreased by EUR 104 million during the quarter. Net working capital at the end of the period totalled EUR 511 million (102). Advances received at the end of the period totalled EUR 1,039 million (1,375). Net working capital has been exceptionally low in 2007 and 2008 due to the high amount of advances received. Liquid reserves at the end of the period amounted to EUR 262 million (158).
Net interest-bearing loan capital totalled EUR 575 million (369). Wärtsilä had interest bearing loans totalling EUR 852 million (539) at the end of September 2009. The existing funding programmes include long term loans EUR 622 million, Committed Revolving Credit Facilities totalling EUR 530 million and Finnish Commercial Paper programmes totalling EUR 700 million. At the end of the period non-utilised committed credit facilities totalled EUR 530 million. In addition Wärtsilä has agreed on a EUR 30 million long-term loan that will be disbursed in November 2009. The total amount of short-term debt maturing within the next 12 months is EUR 230 million.
The solvency ratio was 35.4% (34.7) and gearing was 0.43 (0.34).
HOLDINGS
Wärtsilä owns 7,270,350 B shares in Assa Abloy, or 2.0% of the total. This holding has been booked in the balance sheet at its market value at the end of the reporting period, EUR 81 million.
CAPITAL EXPENDITURE
Gross capital expenditure in the review period totalled EUR 98 million (272), which comprised EUR 15 million (162) in acquisitions and investments in securities, and EUR 82 million (110) in production and information technology investments. Depreciation for the review period amounted to EUR 91 million (68).
Capital expenditure for 2009 will be brought down from the previously indicated level of EUR 180 million excluding acquisitions to approximately EUR 160 million including acquisitions (EUR 366 million in 2008).
STRATEGIC ACQUISITIONS, JOINT VENTURES AND EXPANSION OF THE NETWORK
Wärtsilä continued pursuing its strategy of expanding its network with new service facilities in amongst others Ukraine, Cameroon, Hungary, Chile and Dubai. The facilities provide a good base for future service growth and expanding the network will remain one of Wärtsilä’s strategic focus areas also in the future.
In May, Wärtsilä acquired 60% of the shares of Wärtsilä Navim Diesel of Italy, thus increasing its ownership of the company to 100%. Wärtsilä Navim Diesel, which specialises in marine sales and service, has a strong market position, particularly in the Cruise & Ferry segment. The transaction resulted in EUR 8 million of new goodwill.
MANUFACTURING
The Ship Power market has substantially weakened since the economic crisis began and the market shift to Asia continues stronger than ever. As a consequence, Wärtsilä is in the process of analysing its manufacturing footprint. Various alternatives are being evaluated for adjusting to these changes in the market. The analysis will comprise all manufacturing units with the major focus being on capacity adjustments in Europe. The impact on different units will be specified during the fourth quarter of 2009 and the first quarter of 2010. Wärtsilä has manufacturing units in Finland, Italy, the Netherlands, Norway, Spain, the United Kingdom, China, India, Japan and Korea.
RESEARCH & DEVELOPMENT
After performing successfully in a series of tests, the Wärtsilä sulphur oxides (SOx) scrubber has been granted the Sulphur Emission Control Area (SECA) Compliance Certificate by the classification societies Det Norske Veritas and Germanischer Lloyd.
PERSONNEL
In May, Wärtsilä Ship Power announced that it had initiated the formal process to reduce 400-450 jobs. The negotiations were initiated to adjust to the substantially weakened global marine market situation. The annual savings from these measures will be approximately EUR 30 million. The effect of the savings will start to materialise gradually from the second half of 2009, and will take full effect by the end of 2010. In the second quarter Wärtsilä recognised EUR 6 million of nonrecurring expenses in its operating result related to the adjustment measures taken in the Ship Power business. Altogether, Wärtsilä Ship Power employs sales, project management, engineering services and ship design personnel in 30 countries.
Wärtsilä had 18,806 (18,268) employees at the end of September. The average number of personnel during January-September 2009 totalled 18,897 (17,386). Services had 11,318 employees (10,623), a growth of 7%. The growth is mainly due to the expansion of the network, recruitments in relation to new O&M contracts and the commissioning of Wärtsilä Ship Power’s and Power Plants’ all time high deliveries.
SUSTAINABLE DEVELOPMENT
In the third quarter Wärtsilä signed the United Nations Global Compact initiative and was registered as a participant by the UN Global Compact Office. With this action Wärtsilä further consolidates its commitment to sustainable business practices, and to the compact’s underlying principles in the areas of human rights, labour, the environment and anti-corruption.
CHANGES IN MANAGEMENT
The following appointments have been made to Wärtsilä Corporation’s Board of Management, with effect from 1 August 2009:
Christoph Vitzthum (40) MSc (Econ.) has been appointed Group Vice President, Services.
Vesa Riihimäki (43) MSc (Eng.) has been appointed Group Vice President, Power Plants and a member of the Board of Management.
DECISIONS TAKEN BY THE ANNUAL GENERAL MEETING
Wärtsilä’s Annual General Meeting held on 11 March 2009 approved the financial statements and discharged the members of the Board of Directors and the company’s President & CEO from liability for the financial year 2008. The Meeting approved the Board of Directors’ proposal to pay a dividend of EUR 1.50 per share totalling EUR 148 million. Dividends were paid on 23 March 2009.
The Annual General Meeting decided that the Board of Directors shall have six members. The following were elected to the Board: Ms Maarit Aarni-Sirviö, Mr Kaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr Antti Lagerroos, Mr Bertel Langenskiöld and Mr Matti Vuoria.
The firm of authorised public accountants KPMG Oy Ab, was appointed as the company’s auditors.
MARKET OUTLOOK
Maritime freight rates are still on low levels. The lower new building prices have attracted some owners to contract new vessels. The overall situation is still challenging and it is difficult to judge which direction the markets will take next. Wärtsilä’s activity in many segments of shipping is valuable as the weakness in some segments is likely to continue at least another two years.
Wärtsilä Power Plants estimates to see improved order intake levels along with the financing sector recovery and remains in a good position to maintain its market shares.
Services continues stable and the large installed base, extensive network, as well as the need for environmental upgrades provide a solid market base.
WÄRTSILÄ’S PROSPECTS FOR 2009 REITERATED
Despite the risk of cancellations and the nonrecurring restructuring items booked in the second quarter, the order book for 2009 should support a 10-20 percent growth in net sales for 2009, which would maintain profitability at last year’s good level.
WÄRTSILÄ INTERIM REPORT JANUARY - SEPTEMBER 2009
This interim financial report is prepared in accordance with IAS 34 (Interim Financial Reporting) using the same accounting policies and methods of computation as in the annual financial statements for 2008. All figures in the accounts have been rounded and consequently the sum of individual figures can deviate from the presented sum figure.
Use of estimates
The preparation of the financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the valuation of the reported assets and liabilities and other information, such as contingent liabilities and the recognition of income and expenses in the income statement. Although the estimates are based on the management’s best knowledge of current events and actions, actual results may differ from the estimates.