Finland-based marine and energy equipment maker Wärtsilä expects the third quarter of the year to be better than the corresponding one of 2020 but has warned that prevailing market conditions make the outlook uncertain.
The company made the statement Tuesday as part of the release of its second-quarter results.
In the second quarter of 2021, Wärtsilä's order intake grew by 14% to EUR 1,15 billion up from 1,01 billion a year ago. Service order intake increased by 24% to EUR 604 million, versus 486 million euros a year ago.
Net sales, however, decreased by 7% to 1,13 billion Euros, versus 1,22 billion in the second quarter of 2020.
Operating results increased by 18% to 58 million euros, from 49 million in 2Q 2020.
Hakan Agnevall, Wärtsilä President and CEO said: "During the second quarter of 2021, we saw signs of stabilization and recovery in our markets, despite the prevailing uncertainty. In our key energy markets, the market situation stabilized, but many investments in new power plant capacity still continued to be postponed. "
In the marine markets, Agnevall said vessel ordering activity improved, although activity in the company's key vessel segments remained relatively low.
"In particular, the important cruise industry is still heavily affected by COVID-19 related restrictions. The demand for services has developed positively across vessel segments, supported by improved vessel activity and earnings. We saw good demand for long-term agreements, as customers wish to secure the performance of their fleet," he said.
He said that profit for the quarter was boosted by the marine power and energy segments, but was hit by underperformance in the marine systems segment.
Agnevall said: "While net sales decreased, we succeeded in improving our profitability, and our comparable operating profit increased by 30%. Marine Power and Energy clearly improved their results, while Marine Systems suffered from low net sales driven by postponed scrubber retrofits. Customers’ interest towards smarter, digitalized, greener, and safer solutions supported the growth in Voyage’s order intake and net sales. The number of vessels connected to our cloud solutions increased by 78%."
Looking ahead, Agnevall said the company expected the demand environment in the third quarter to be better than that of the corresponding period in the previous year.
"In the longer term, we see exciting opportunities driven by the decarbonization transformation of both the marine and energy industries," Agnevall said.