Wärtsilä Corporation Half Year Financial Report January-
Stable net sales and strong cash flow, while COVID-19 impact and mix weakened profitability
This release is a summary of
HIGHLIGHTS OF APRIL-
· Order intake decreased by 27% to
· Net sales was stable at
· Book-to-bill amounted to 0.83 (1.13)
· Comparable operating result decreased by 51% to
· Earnings per share decreased to
· Cash flow from operating activities increased to
HIGHLIGHTS OF JANUARY-
· Order intake decreased by 19% to
· Order book at the end of the period decreased by 12% to
· Net sales increased by 1% to
· Book-to-bill amounted to 0.95 (1.18)
· Comparable operating result decreased by 48% to
· Earnings per share decreased to
· Cash flow from operating activities increased to
WÄRTSILÄ'S PROSPECTS
The markets in which
"The adverse impact of COVID-19 on both our own operations and those of our customers increased during the second quarter. This was clearly visible in the decrease in orders received across all businesses. The decline in demand was especially strong in the cruise industry, as travel bans and other mitigation measures have kept most passenger vessels idle for the past few months. Customer interest in scrubber investments was another area of weakness, due to the turmoil in global oil markets. In the Energy business, customers remained hesitant to commit to new investments. With this is mind, the order to supply a 200 MW flexible baseload power plant to
Given this difficult back-drop, second quarter net sales held up reasonably well. This was mainly thanks to increased equipment deliveries, which offset the volume decline in services. The resulting sales mix weakened our profitability, as did COVID-19 driven cost inflation, lower than normal capacity utilisation in our European factories, and the ongoing limited mobility of field service personnel despite some recent easing of travel restrictions. While visibility remains low, it is clear that the effects of the pandemic on our financial performance this year will be material. The short-term cost saving initiatives announced in the first quarter to moderate these effects have progressed according to plan. In the second quarter, we realised the first savings, both from reduced discretionary spending and worktime reductions.
The highlight of the quarter was clearly the strong development in cash flow. I'm pleased to see that our efforts to decrease credit risk by intensifying receivables collection has paid off. Strengthening our liquidity reserves has also been a priority. During the second quarter, we extended and expanded our revolving credit facilities, and initiated arrangements for additional two-year term loans.
In addition to securing our financial position, we have taken extraordinary precautions to secure the health and safety of our people and focused on developing commercial solutions to support our customers in overcoming the COVID-19 related business disruption. One example of such a solution is Wärtsilä
Mitigating the COVID-19 related near-term business disruptions has naturally been high on our agenda. However, positioning ourselves for the eventual market recovery is of equal importance. Our new organisational structure, which became operational at the beginning of July, is central in this context. Our business areas are today in very different development phases and thus require different strategies for creating long-term value.
MEUR 4-6/ 4-6/ Change 1-6/ 1-6/ Change 2019
2020 2019 2020 2019
Order intake 1,011 1,377 -27% 2,259 2,793 -19% 5,327
of which services 486 623 -22% 1,120 1,277 -12% 2,683
Order book, end of 5,401 6,157 -12% 5,878
period
Net sales 1,220 1,217 0% 2,390 2,368 1% 5,170
of which services 510 613 -17% 1,103 1,186 -7% 2,505
Book-to-bill 0.83 1.13 0.95 1.18 1.03
Operating result 49 96 -49% 101 187 -46% 362
% of net sales 4.0 7.9 4.2 7.9 7.0
Comparable operating 55 113 -51% 111 215 -48% 457
result
% of net sales 4.5 9.3 4.7 9.1 8.8
Comparable adjusted 63 123 -49% 128 236 -46% 498
EBITA*
% of net sales 5.2 10.1 5.4 10.0 9.6
Profit before taxes 36 83 -57% 79 162 -51% 315
Earnings/share,
Cash flow from 252 -37 293 -2 232
operating activities
Net interest-bearing 643 746 726
debt, end of period
Gross capital 54 54 122
expenditure
Gearing 0.31 0.33 0.30
Solvency, % 35.0 40.5 40.8
Personnel, end of 18,334 19,239 -5% 18,795
period
*Comparable adjusted EBITA excludes items affecting comparability and purchase price allocation amortisation.
As published in the Interim report January-
ANALYST AND PRESS CONFERENCE
A virtual analyst and press conference will be held today, Friday
To participate in the teleconference, please register at the following address: http://emea.directeventreg.com/registration/3341178. You will receive dial-in details by e-mail once you have registered. If problems occur, please press *0 for operator assistance. Please press *6 to mute your phone during the teleconference and to unmute.
A recording of the webcast will be available on the company website later during the day.
For further information, please contact:
Executive Vice President & CFO
Tel: +358 10 709 5444
arjen.berends@wartsila.com
Vice President, Investor Relations
Tel: +358 10 709 5637
natalia.valtasaari@wartsila.com
For press information, please contact:
Executive Vice President, Communications, Branding & Marketing
Tel: +358 10 709 5599
atte.palomaki@wartsila.com
www.wartsila.com
https://news.cision.com/wartsila-corporation/r/wartsila-s-half-year-financial-report-january-june-2020,c3155179
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