January 30, 2019 / 7:39 AM / 4 months ago

UPDATE 1-Finland's Wartsila to cut 1,200 jobs after profit fall

(Adds quotes, details on outlook, order intake)

By Anne Kauranen

HELSINKI, Jan 30 (Reuters) - Finnish ship technology and power-plant maker Wartsila said it would shed 1,200 jobs, six percent of its workforce, to save 100 million euros a year by the end of 2020 as it missed quarterly profit forecasts.

Wartsila said on Wednesday that demand in 2019 was expected to remain in line with the year before, while the global shipbuilding industry should recover from a lengthy downturn.

But the company, which employs 19,300 people, said its fourth-quarter adjusted operating profit fell 6 percent from a year ago to 226 million euros ($259 million), missing analysts’ average expectation of 271 million euros.

“The group sales mix favoured equipment deliveries, which, together with increased costs related to research, development and digitalisation, burdened profitability,” Wartsila’s chief executive Jaakko Eskola said in a statement.

Wartsila said its order intake in the fourth quarter increased 24 percent year-on-year to 1.87 billion euros thanks to improved demand in its marine newbuild and service markets.

Its order intake for its marine solutions business grew 33 percent year-on-year to 419 million euros.

“Environmental considerations emerged as a key theme in the marine markets, as customers sought to prepare themselves for compliance with the IMO 2020 global sulphur cap,” Eskola said, referring to demands to reduce maritime emissions by 2020.

Wartsila is the market leader in so-called sulphur scrubbers that strip sulphur as fuels are burned, allowing ships to continue using high-sulphur fuel oil.

“Another contributor to the increase in order intake was the high level of activity in the cruise and ferry markets,” Eskola added.

Wartsila’s board of directors proposed a dividend of 0.48 euros per share for 2018, in line with market expectations, and said the amount would be paid in two separate instalments. ($1 = 0.8740 euros) (Reporting by Anne Kauranen and Tarmo Virki; Editing by Shreejay Sinha and Alexander Smith)

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