By Anne Kauranen and Marta Frackowiak
HELSINKI (Reuters) -Wartsila still believes the decarbonisation of marine traffic will continue despite a delay to establishing a global carbon price for shipping, its CEO said on Tuesday, as it reported third-quarter order intake below market expectations.
The Finnish engineering group, one of the world’s biggest ship engine makers, has invested in emissions reduction technologies for ships and power plants. It expects higher demand for those under the International Maritime Organisation’s climate plan.
However, a decision on a global price on shipping emissions was delayed by a year earlier this month under U.S. pressure.
ENERGY STORAGE ‘HEAVILY IMPACTED’ BY US TARIFFS, REGULATIONS
Though quarterly order intake fell 0.7% year-on-year to 1.79 billion euros ($2.09 billion), Hakan Agnevall told Reuters Wartsila had not seen any negative impact on orders as a result of the IMO delay.
“The decarbonisation journey continues,” he said. “We continue to sell, because [ship] owners want to kind of hedge their bets. They want the fuel flexibility, and they certainly want the fuel efficiency.”
Instead, Agnevall said, among other factors, orders had been dented by Wartsila’s energy storage business being “heavily impacted” by U.S. import duties and Foreign Entity of Concern regulation.
The energy storage unit accounted for 12% of the company’s sales last year. But Agnevall said it received no new orders in the third quarter after FEOC regulation included in U.S. President Donald Trump’s so-called “One Big Beautiful Bill Act”, banned the import of Chinese-made battery cells to the United States in July.
To mitigate the impact, Wartsila is now looking at sourcing battery cells from the U.S. or other Asian countries, he said.
Company shares fell 2% in afternoon trading, as investors had expected higher growth and a better outlook, especially for energy equipment orders.
“This may be disappointing for investors who were expecting Wartsila to upgrade the demand outlook on potential upside from data centre orders,” JPM analysts wrote in a note, referring to Wartsila leaving its energy demand outlook unchanged.
Despite the IMO setback, Wartsila also left its marine outlook unchanged, expecting higher demand.
“There will be a journey to a more fragmented regulatory landscape, because countries and regions will have their own frameworks,” Agnevall said.
($1 = 0.8575 euros)
(Reporting by Marta Frąckowiak in Gdansk and Anne Kauranen in Helsinki; Editing by Milla Nissi-Prussak and Joe Bavier)
