Wärtsilä Defies Euro-Slowdown As Cargotec Suffers
HELSINKI, Oct 24 (Reuters) – Power plant and ship engine manufacturer Wartsila posted a stronger than expected rise in quarterly profit on Thursday, one of the few big Finnish concerns to resist the pull of Europe’s economic downturn.
Wartsila said its order book has taken a hit from customers delaying investments, but stronger profit still helped to lift its shares 2.7 percent to 32.79 euros by 1254 GMT, one of the biggest rises in Helsinki’s flat HEX25 index.
Chief Executive Bjorn Rosengren said expansion beyond Europe, particularly in power generation, had helped to stabilise results.
“The power generation business is truly global, and slow development in Europe is compensated by growth in the emerging markets,” he told Reuters.
A 14 percent drop in orders, however, prompted Wartsila to trim its 2013 sales growth forecast to 0-5 percent from the previous estimate of up to 10 percent.
Rosengren said a “true pickup in the ordering trend requires positive macroeconomic development”.
Finland is one of the euro zone’s few remaining triple-A rated countries, but it fell into recession this year as the weakness of the zone’s economy hurt its core paper and shipping industries.
Cargo handling equipment maker Cargotec suffered a more direct hit from a slowdown in demand for Finnish exports.
It said it was cutting up to 250 more jobs after third-quarter operating profit, excluding restructuring costs, fell 9 percent to 35.4 million euros.
Cargotec had already flagged weak results and cut its full-year outlook as its MacGregor unit, which makes hatch covers and cranes for ships, suffered from a decline in merchant ship sales. Cargotec’s shares were down 1.6 percent at 1254 GMT to 27.68 euros.
Shrinkage in the global mining industry hurt Finnish engineering company Metso and its Swedish rival Sandvik, both of which announced weak numbers on Thursday. Metso’s shares were down almost 3 percent.
But Wartsila saw signs of an upturn among its shipping and shipbuilding clients, forecasting that orders for product tankers, large container ships and gas carriers would pick up.
Wartsila has been trying to develop its business with new industrial technologies such as “scrubbers” that help to cut the sulphur oxide in ship exhausts, with an eye on what Rosengren said was likely to be a tightening of emission regulations.
Its third-quarter operating profit, excluding one-off items, rose to 138 million euros ($190 million) from 113 million a year earlier, beating the average forecast of 132 million euros in a Reuters poll of analysts. ($1 = 0.7256 euros) (Reporting by Ritsuko Ando; Editing by Kevin Liffey)
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