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WÄRTSILÄ WEAKENED BY COVID-19 BUT SALES REMAIN STABLE

Friday, July 17, 2020 

Wärtsilä Corporation has released its half year financial report January–June 2020 which shows stable net sales and strong cash flow, while COVID-19 impact and mix weakened profitability.

The markets in which Wärtsilä operates are being affected by the coronavirus outbreak while measures taken to contain the pandemic have impacted on the final figures.

Jaakko Eskola (pictured), President and CEO, said: “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."

Eskola pointed out that given these difficulties, second quarter net sales held up reasonably well, mainly thanks to increased equipment deliveries, which offset the volume decline in services.

Referring to measures taken to increase risk he said: " 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."

Eskola continued: "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. Marine Power, Marine Systems, and Energy will continue to focus on driving performance by strengthening their lifecycle offerings. Voyage, on the other hand, still needs investments in R&D, sales, and marketing to scale the digital business and to create a basis for sustainable, profitable growth. Thanks to its unique offering, and with the maritime industry’s increasing interest in utilising data to optimise performance, I am confident that Voyage will eventually play a key role in Wärtsilä reaching its long-term financial targets.”

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