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Geopolitical uncertainty is slowing demand in the marine market - Wärtsilä

Logistic News - Published on Thu, 26 Apr 2018

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The demand for Wärtsilä’s services and solutions in 2018 is expected to improve somewhat from the previous year. Demand by business area is anticipated to be as follows:

Good in Services thanks to growth opportunities in selected regions and segments.

Good in Energy Solutions. The global shift towards renewable energy sources and increasing electricity demand in the emerging markets are supporting the need for distributed and flexible power capacity, including gas-fired generation, energy storage, and smart integration technology.

Solid in Marine Solutions. Despite improving sentiment, the marine market environment remains challenging due to overcapacity and lack of financing.

Wärtsilä’s current order book for 2018 deliveries is EUR 2,951 million (2,744), which mainly comprises equipment deliveries. Services’ business is largely transactional, with only around 30% of annual net sales coming from the order book.

“The beginning of 2018 was characterised by a favourable operating environment in the equipment businesses. Ordering activity was healthy in Energy Solutions, thanks to the growing need for flexible, smart solutions in developed countries, and energy infrastructure investments in the emerging markets. For Marine Solutions, improved demand in the merchant segment and sustained activity in the cruise and ferry markets contributed to growth in orders received. While the economic outlook continues to support a gradual recovery in the marine industry, the impact of increased geopolitical uncertainty on customer decision-making is a concern. Services’ net sales development was slower than expected during the first quarter, as customers in the merchant and offshore segments continued to limit spending to essential repairs and maintenance. As a result, the group sales mix favoured equipment deliveries, which burdened profitability.

Strengthening our digital offering, for instance through the projects developed in our acceleration centres, is central to securing our competitive position in industries being transformed by increasing connectivity and new business models. The acquisition of Transas, a leader in marine navigation solutions, training and simulation services, as well as ship traffic control is also important in this context. It builds on our investments in software engineering capabilities and artificial intelligence and will play a key role in the development of smart solutions and a digital platform. With this acquisition, we take a considerable step forward towards our Smart Marine vision, which, alongside our Smart Energy vision, strongly positions Wärtsilä to enable a sustainable, low emission economy.”

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Posted By : Nanda Koijam on Thu, 26 Apr 2018
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