Finland’s Wartsila is set to announce a drop in its profitability.
The company had forecast a 5 per cent growth in net sales with profitability reaching 13 per cent but has now had to revise that initial prediction.
The company said in a statement it expects net sales to instead decline by around 5 per cent and its operating profit margin to be around 12 per cent. They cited a reduction in power plant deliveries for the disappointing results.
There was better news for the company in the performance of its Latin American business. Wärtsilä has been awarded five power plant projects, which will support development of the national grid in Argentina.
Contracts for three power plants, totalling EUR78m, have been signed with Industrias J.F.Secco S.A. (Secco) and are included in Wärtsilä’s order book for the second quarter of 2016. Additionally, Wärtsilä has been awarded two projects with two other Argentinian independent power producers, which are expected to be included in Wärtsilä’s order book in the third quarter of 2016.
The combined output of all five plants will be 382 MW. The total value of these orders is estimated to be approximately EUR150m.
The three power plants for Secco, with a total output of 192 MW, are all based on Wärtsilä dual-fuel engines. The plants will be run primarily on gas and heavy fuel oil will be used as the back-up fuel. All plants are expected to be operational by mid 2017.
Thirteen Wärtsilä 34DF dual-fuel engines are included in the deliveries for two of the plants, while four Wärtsilä 50DF dual-fuel engines will power the third plant
Argentina issued a tender that led to the contracts as the government seeks to ensure grid reliability despite a scenario whereby gas is only available at certain times of the year.
“We need dual-fuel technology to cope with the varying supply of natural gas here in Argentina. Wärtsilä’s technology and the technical support that they have provided were the key reasons why we chose to work with Wärtsilä,” says Osvaldo C. Calvo, International Business Manager, Industrias J.F.Secco S.A.
[bc_video account_id=”1214147015″ player_id=”4697982639001″ video_id=”5165685288001″ min_width=”320px”]