Wärtsilä has posted a decrease of 29 per cent to €979 million (US$1.08 billion) in its order intake in the third quarter of 2019 (Q3 2019), resulting in a January to September overall decrease of 15 per cent to €3.77 billion (US$4.19 billion).
The company has also incurred a 16 per cent drop in net sales to €1.12 billion (US$1.24 billion) in Q3 2019 for a January to September decrease of four per cent to €3.48 billion (US$3.87 billion).
Further, Wärtsilä projects demand for its marine and energy business services in the coming 12 months to be somewhat below that of the previous 12 months.
Company president and CEO Jaakko Eskola has cited lower vessel contracting volumes, a decline in the demand for scrubber solutions from the previous year's exceptionally high level, and a rapidly changing energy landscape creating uncertainty among customers as the key reasons for the projected lower demand.
Wärtsilä's full-year operating result was weakened by unforeseen cost overruns in some marine and energy projects. The full-year result will be impacted by a one-time charge amounting to €150 million (US$166 million), of which €84 million (US$93 million) has already been recognised.
A review of the projects in question revealed incorrect underlying assumptions in cost estimates, insufficient risk identification, and supplier related challenges.
The company claims to have since implemented corrective actions such as introducing tighter controls on technical assessments and the supplier approval process and strengthening the project management organisation to prevent similar issues from occurring in future.