Scrubber sales are no longer booming at Finnish supplier Wärtsilä.
While shipping companies across the globe, after some hesitation, opted to buy scrubbers, demand has slowed down, says CEO Jaakko Eskola in relation to the company’s fourth quarter 2019 interim report.
“Furthermore, the demand for scrubbers declined from exceptionally high levels in the previous year, as a result of uncertainty related to the price and availability of bunker fuels,” he says.
The demand for scrubbers declined from exceptionally high levels in the previous year”
Jaakko Eskola, CEO, Wärtsilä
The start of 2020 has otherwise been favorable to the shipping companies that already have scrubbers installed to ensure compliance with the global sulfur regulation.
The price of 0.5 percent sulfur fuels increased more than anticipated in the first weeks of the year, and as such, shipping companies with scrubbers installed have had much lower fuel costs than their competitors, as they can still sail on traditional 3.5 percent heavy fuel oil.
The question is how easy it will be to get a hold of the traditional fuel oil when most of the global fleet will sail on the newer fuels. And this is now evident at Wärtsilä, where customers are postponing the decision to invest in scrubbers, notes the company.
Green solutions
Wärtsilä’s order intake dropped 17 percent in the fourth quarter 2019 to EUR 1.6 million. The operating profit dipped to EUR 202 million from EUR 226 million, while the result before taxes came to EUR 153 million, down 21 percent compared to the same period the year before.
Eskola describes 2019 as a tough year in terms of demand, and with weak financial results. Even though deliveries in marine and energy increased, the result was hit by higher costs than expected on some complex projects.
Marine orders increased in the fourth quarter, but not enough to raise the level to that of previous years.
“In the marine markets, vessel contracting fell short of initial forecasts, largely due to concerns related to the implications of geopolitical developments on seaborne trade,” says Eskola.
The industry’s focus on the environment and not least the coming regulations has increased interest in liquefied natural gas, LNG, as fuel, writes Wärtsilä. The same applies to battery packs for various ship types.
The company expects a weak coming year compared to 2019.
English Edit: Daniel Logan Berg-Munch
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