Finnish maritime technology giant Wartsila has increased earnings in the third quarter as owners continue to order more new ships.
The engine maker said net profit was €144m ($156m), up from €82m a year ago, as revenue rose to revenue €1.72bn against €1.45bn.
Chief executive Hakan Agnevall said that despite growth in shipyard capacity and output, especially in China but also in South Korea, slot utilisation remains high, indicating that a shortage of yard space still exists.
He added that decarbonisation-related retrofits and longer trade routes have supported the demand for its ship-service division.
“Investments in new ships increased compared to last year with a positive trend in the interest for alternative fuels,” Wartsila added.
Healthy earnings for shipowners and low orderbooks in certain segments drove renewal.
In total, 1,953 new ship contracts were reported between January and September, compared to 1,356 in the same period of 2023, the company said.
There have been 486 orders for alternative fuel-capable ships to 30 September.
According to Clarksons Research, global shipyard capacity is currently at 70% of its 2011 peak level and could increase to between 80% and 85% by 2030, mainly driven by yard reactivations and expansions in China.
The country has accounted for about 75% of announced capacity increases since 2021.
Fuel uncertainty benefiting LNG uptake
“Uncertainty on the availability and price of sustainable future fuels has partially supported growth in interest for LNG,” Wartsila explained.
But the number of new LNG carriers entering the market, which exceeded the rise in demand, impacted sentiment, the company said.
“However, the healthy demand for newbuild capacity continued to be driven by further investments in expanding LNG liquefaction capacity, especially for projects linked to Qatar,” Wartsila added.
Service demand increased due to high fleet utilisation levels for gas carriers, and continued interest in service agreements, the company noted.
“In the containership sector, the sentiment has become more positive as trade volumes and rerouting of ships have contributed to higher-than-expected demand for ship capacity,” it said.
And investment appetite for newbuildings has increased in recent months as shipowners continue to renew their ageing fleets, Wartsila added.
