Finnish marine technology group Wartsila is expecting better demand for its services this year as shipping comes through the “turmoil” of the Covid-19 pandemic.
The company logged net earnings of €85m ($95m) in the fourth quarter, compared to €55m in the same period of 2020.
The order intake increased by 92% to €2.15bn, and revenue from €1.59bn from €1.22bn.
The group said the demand environment looks better in the first three months of this year than it did a year ago.
But chief executive Hakan Agnevall said the pandemic continued to affect its market and operations.
“New virus variants reminded us that the pandemic is not yet over. However, we saw signs of stabilisation and recovery in both the marine and energy markets, and the order intake improved towards year-end," he added.
Agnevall noted mixed activity levels across different vessel segments.
Newbuilding orders improved, largely driven by container ships.
More activity at shipyards
The company said 1,855 contracts for new vessels were registered in 2021, up from 815 the year before.
The surge in newbuild ordering has supported the forward cover of larger shipyard groups, which have managed to mitigate the impact of a rapid increase in raw material costs by increasing the price for vessels, Wartsila said.
However, high earnings and tonnage demand have led to postponements of activities that require drydocking, such as scrubber retrofits.
The marine systems division continued to be “burdened” by low scrubber volumes, Agnevall said.
Scrubbers for newbuildings
The price differential between high and low-sulphur fuels increased throughout the year to $150 per tonne.
“The interest in scrubber installations continues to be mostly driven by newbuilds, with orders recorded for 231 vessels globally in 2021,” Wartsila said.
The most attractive vessel segments for Wartsila, involving specialised tonnage, have recovered from pandemic disruption to a varying degree.
The key cruise sector remained muted, although the active capacity increased from 20% at the end of June to around 70% at the end of December.
Demand for offshore construction-related vessels, such as wind turbine installation ships, has improved, thanks to strong growth in active offshore wind farms, Wartsila believes.
And the LNG carrier sector remains healthy, as inventories have been at record-low levels, thus supporting LNG trade and the demand for tonnage, regardless of a strong increase in gas prices, the company said.
The group has a target of 5% organic growth annually and an operating margin of 12%, with the focus on energy storage and marine services.
