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Strong service results outweigh lower engine orders at Wärtsilä

Strong service results outweigh lower engine orders at Wärtsilä
Wärtsilä has reported improved results in the second quarter as lower fuel prices free up shipowners' cash for servicing, but new orders took a nosedive.

Sales at the company increased 10% in the second quarter compared to the same period last year, up to EUR1.2bn from EUR1.1bn, with the services business in particular experiencing a 13% increase in order intake.

For Ship Power division, renamed Marine Solutions, order intake fell 53% with contracts for 458 vessels, down from Q2 2014's 973 vessels. Along with the rebrand, Wärtsilä has announced a restructuring that will see 600 jobs lost.

"Contracting activity was particularly weak in the dry bulk and offshore segments," the company's earnings release stated. "Oil prices recovered somewhat during the second quarter, yet the offshore markets remain challenging and oil companies continue to focus on cutting costs. Current oil price levels and improved earnings supported crude tanker contracting."

The company's figures suggest that the slowdown is being felt across the market, as Wärtsilä edged up its share of both the main and auxiliary engine markets, to 59% and 5% respectively.

Despite the recent drop in orders, all sectors of the business ended the quarter with a stronger orderbook than at the same time last year, with Marine Solutions up 25% to EUR2.7bn and Services up 25% to EUR1bn.