This is the market outlook from the Interim Report January-June 2010 that was published on July 21st, 2010
In the marine industry, attractive new building prices, healthy earnings levels, and a more balanced vessel orderbook have led to a pick-up in market activity in all main vessel segments and this development is expected to continue throughout the year. For Wärtsilä, the most interesting developments are in specialised tonnage and in the offshore area.
Even though markets have bottomed out, the prevailing conditions will maintain ordering volumes at lower levels than during the previous peak years. Competition and price pressure among shipbuilding suppliers will remain intense. Wärtsilä expects Ship Power’s order intake to clearly improve compared to 2009.
The power generation market recovery is expected to continue in 2010. The recovery will happen at a varying pace in different regions and countries. The emerging markets are anticipated to be in the forefront of the recovery and the Flexible baseload and Grid stability & peaking segments are expected to pick-up first. Western Europe and the USA are not expected to recover during 2010. Wärtsilä estimates its Power Plants’ order intake to improve in 2010.
Uncertainty will continue in 2010 with regards to larger service projects, as many customers are still adapting to the consequences of the economic crisis. Services development is expected to remain steady. Though the size of the active fleet remains stable, the scrapping of older tonnage and its replacement with new tonnage, which is still under warranty and has lower maintenance needs, may impact Services. Power plant installations continue to be run at high operating levels. Environmental compliance and economic considerations have been the main drivers of this business, and will remain so in the foreseeable future. Wärtsilä is continuously developing its portfolio in these areas. Customers are increasingly looking for remote management and optimisation of their assets, as this allows them to simultaneously reduce both their costs and environmental footprint. Wärtsilä also sees an increased interest in maintenance partnerships, which reduce the fixed costs for our marine, offshore and power plant customers.
