Waertsilae Oyj (WRT1V), the Finnish maker of scrubbers that remove sulfur from ship fumes, won more orders for its marine power unit in the first quarter as demand from the offshore energy industry offset a merchant-fleet slump.
“At the moment, the quotation levels are high, the market is very active and there are a lot of activities all over the world,” Jaakko Eskola, head of the company’s ship power business said at an earnings briefing today. “We don’t see any changes in the market yet.”
First-quarter order intake for the unit jumped 60 percent to 443 million euros ($579 million), Helsinki-based Waertsilae said today in a statement. Net income rose to 72 million euros from a restated 65 million euros, missing the 79.9 million-euro average estimate of seven analysts surveyed by Bloomberg.
Increasing shipping costs are hurting the merchant shipping market, pushing Waertsilae to find new customers in the offshore industry. The company recently expanded operations in Brazil.
“The shortfall in earnings seems to be largely due to timing issues,” Nordea Bank AB said in a note to clients today. It has a buy rating with a 12-month price estimate of 38 euros on the stock. “The order book being up 13 percent year-on-year should still support the guidance.”
Waertsilae shares advanced 1.3 percent to 34.69 euros at 3:50 p.m. in the Finnish capital. Volume was more than twice the average traded daily over the past three months.
Waertsilae kept its full-year outlook unchanged, projecting sales growth of as much as 10 percent in 2013. Last quarter’s revenue was 882 million euros, below the 1.09 billion-euro average estimate.
Waertsilae is set for a boost in profit as ship owners order more scrubbers, driven by new rules to cut pollution in the Baltic and North Seas. Waertsilae won an order last quarter to supply exhaust-gas cleaning systems to four new container vessels under construction for Ignazio Messina & Co.
Even so, many ship owners continue to postpone the decision to retrofit vessels to comply with the rules, according to Chief Executive Officer Bjoern Rosengren.
“There is a lot of hesitation in placing orders,” Rosengren said at the company’s headquarters. “It is a big investment and they try to prolong it as much as they can. I’m convinced we will see more orders coming through the year.”
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