Finland’s Wartsila has surged back to profit in the first quarter despite economic headwinds.
Vessel orders at shipyards fell back year on year but strong LNG and offshore oil-and-gas shipping markets helped boost revenue and the bottom line.
The engine and scrubber manufacturer said net earnings to 31 March were €61m ($67m), compared with a loss of €142m in the same period of 2022.
The order intake increased by 26% to €1.7bn and revenue was up 19% at €1.5bn.
Chief executive Hakan Agnevall said: “Although facing continued uncertainties in the operating environment, we successfully delivered growth and higher profitability.”
“The global economic headwinds continued despite some improvements, including the reopening of China and decreasing energy costs. Cost inflation continued to burden the order backlog of our new equipment business,” he added.
The company said rising newbuilding prices combined with limited shipyard capacity continued to hamper ordering activity.
As a result, 255 newbuilding contracts were signed globally in the quarter, down from 274 in 2022.
Interest in alternatively fuelled vessels remained relatively stable, with 73 orders reported, equating to 29% of all new deals.
The growth in seaborne trade continued to be limited, with energy-related sectors being better positioned than other cargo sectors.
The recovery in passenger traffic continued and was supported by the pent-up demand following the pandemic, Wartsila added.
Continued demand for LNG ships
“Market sentiment remained positive due to continued demand for LNG vessels, improving fleet utilisation in the passenger travel segment and the growing demand for offshore assets,” the group said.
Offshore vessels have seen further reactivations from lay-up and gains in utilisation and rates across the fleet.
“The demand for offshore wind vessels has remained solid, although contracting for new vessel capacity has slightly eased from previous record levels in, for example, wind turbine installation vessels,” the company added.
The LNG carrier market has remained positive despite typical seasonal unwinding and a more balanced supply/demand outlook following the rapid increase in vessel capacity this year, Wartsila said.
“The investment appetite for new vessel capacity has eased somewhat from the record levels seen in 2022 but continued solid growth in demand for LNG has kept the markets tight,” it added.
