WÄRTSILÄ CORPORATION INTERIM REPORT JANUARY -...

Wärtsilä Corporation INTERIM REPORT 22 July 2009 at 8.30 local time

STRONG SECOND QUARTER - MARKET CHALLENGES CONTINUE

SECOND QUARTER HIGHLIGHTS
- Net sales grew 22% to EUR 1,333 million (1,092)
- Operating result before nonrecurring restructuring items grew to
EUR 155 million (124), 11.7% of net sales (11.4). Including the
restructuring items, operating result totalled EUR 149 million, 11.2
% of net sales.
- Earnings per share amounted to 1.01 (0.96)
- Order intake fell 45% to EUR 785 million (1,432)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2009
- Net sales EUR 2,574 million (1,942), growth 33%
- Operating result before nonrecurring restructuring items grew to
EUR 286 million (206), 11.1% of net sales (10.6). Including the
restructuring items, operating result totalled EUR 280 million, 10.9%
of net sales.
- Earnings per share amounted to 1.90 (1.45)
- Cash flow from operating activities EUR -72 million (207)
- Order intake EUR 1,743 million (3,368 million), a decrease of 48%
- Order book total EUR 5,829 million (7,479), a decrease of 22%
- Materialised order cancellations totalled EUR 154 million

OLE JOHANSSON, PRESIDENT AND CEO:
"The first half of 2009 was strong for Wärtsilä. Net sales grew by
33% to EUR 2,574 million and operating result by 39% to EUR 286
million, EBIT margin being 11.1%. At the same time, the global
economic downturn was reflected in the order intake, which fell 48%.
As expected the Ship Power markets continued to be challenging, and
further cancellations and postponements were seen in the market. For
Wärtsilä cancellations of EUR 154 million materialised during the
first half of 2009 and Wärtsilä sees a potential cancellation risk of
approximately EUR 800 million. Wärtsilä Ship Power has taken
appropriate measures to minimize the effects of the down cycle by
adjusting its operations to current demand. In the Power Plants
market activity remained good in all areas and Services continued its
stable development. Despite the risk of cancellations and the
uncertainty in the market, Wärtsilä's prospects for 2009 remain
unchanged."

WÄRTSILÄ'S PROSPECTS FOR 2009 REITERATED
Despite the risk of cancellations and the nonrecurring restructuring
items booked in the second quarter, the substantial order book at the
end of the year should support a 10-20 percent growth in net sales
for 2009, which would maintain the profitability at last year's good
level.

ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held today, Wednesday 22 July
2009, at 10.45 a.m. Finnish time (8.45 a.m. UK time), at the Wärtsilä
headquarters in Helsinki, Finland. The combined web- and
teleconference can be viewed on the internet at the following
address:


http://wip.goodmood.tv:80/wip/directlink.do?newbrowser=1&pid=2917866.

To participate in the teleconference please call: [phone]
and enter the Conference ID: 838853. If you want to ask questions
during the teleconference, press the number 1 on your phone to
register for a question and the # -key to withdraw a question. The
event title for the call is: Results Q2 2009. Please be ready to
state your details and the name of the conference to the operator. If
problems occur, please press the *-button followed by the 0-button.
We would recommend that you register in advance for the conference in
advance at the following address:
https://eventreg2.conferencing.com/webportal3/reg.html?Acc=783899&Conf=199233.

An on-demand version of the webcast will be available on the company
website later the same day.


Wärtsilä in brief
Wärtsilä is a global leader in complete lifecycle power solutions for
the marine and energy markets. By emphasising technological
innovation and total efficiency, Wärtsilä maximises the environmental
and economic performance of the vessels and power plants of its
customers. In 2008, Wärtsilä's net sales totalled EUR 4.6 billion
with 19,000 employees. The company has operations in 160 locations in
70 countries around the world. Wärtsilä is listed on the NASDAQ OMX
Helsinki, Finland.


INTERIM REPORT JANUARY-JUNE 2009


The figures in this interim report are unaudited.


SECOND QUARTER 4-6/2009 IN BRIEF


MEUR                                         4-6/2009 4-6/2008 Change
Order intake                                      785    1 432   -45%
Net sales                                       1 333    1 092    22%
Operating result (EBIT) before nonrecurring
restructuring items                               155      124    25%
% of net sales                                  11.7%    11.4%
Operating result                                  149
% of net sales                                  11.2%
Profit before taxes                               141      131     7%
Earnings/share, EUR                              1.01     0.96



REVIEW PERIOD JANUARY - JUNE 2009 IN BRIEF


MEUR                                   1-6/2009 1-6/2008 Change  2008
Order intake                              1 743    3 368   -48% 5 573
Order book 30 June                     5 829 *)    7 479   -22% 6 883
Net sales                                 2 574    1 942    33% 4 612
Operating result (EBIT) before
nonrecurring restructuring items            286      206    39%   525
% of net sales                            11.1%    10.6%        11.4%
Operating result                            280
% of net sales                            10.9%
Profit before taxes                         263      206    28%   516
Earnings/share, EUR                        1.90     1.45         3.88
Cash flow from operating activities         -72      207          278
Interest-bearing net debt
at the end of the period                    759      254          455
Gross capital expenditure                    72       87          366

*) Cancellations amounting to EUR 154 million have been eliminated
from the order book during the period January-June 2009.


MARKET DEVELOPMENT

SHIP POWER
The market activity in new building remained very low and only a
handful of ship orders were placed during the second quarter. The
recent decrease in new building prices did not attract owners to
place new orders as the economical fundaments and an oversupply in
bigger ship segments still prevail. The orders that materialised
during the second quarter were mainly placed for specialised tonnage
at specialised yards.

With the exception of increased oil prices, there were no material
changes in the general business environment during the second
quarter. Increased oil prices are expected to have a positive impact
on offshore investments as soon as the pressure on the financial
market eases.

More cancellations and rescheduling of existing newbuilding orders
occurred during the period and markets are expected to continue to
seek balance by cancelling and reorganising orders. The reduction of
existing fleet capacity through temporary lay-ups, scrapping and slow
steaming continues.

Ship Power market shares
Wärtsilä's share of the medium speed main engine market increased
from 35% (at the end of the previous quarter) to 40%. The market
share in low speed engines decreased to 11% (13). In the auxiliary
engine market Wärtsilä's share remained at 6% (6). The decrease in
total contracting volume has led to market shares becoming more
volatile and increasingly sensitive to large individual orders. This
is creating greater variances between reporting periods.

POWER PLANTS
The market environment for Power Plants was mostly unchanged from the
previous quarter. Inquiries for new power plants remained at a high
level and market activity was good with customers showing continued
interest in new flexible capacity. The impact of the financial crisis
was evident through a slower conclusion of projects, mainly due to
difficulties in securing financing. In North America an increased
amount of inquiries were seen. The industrial self-generation
customer segment is so far the most negatively affected market, with
many projects being postponed due to the uncertainty in the market,
or for instance through a lack of demand for minerals.

SERVICES
In the marine industry, the imbalance between vessel capacity and
vessel demand continues to drive capacity adaption through slowing
down vessel speed and vessel lay-ups. During the review period
Wärtsilä launched new service packages in response to demand for all
phases of ship lay-ups and de-activation. The Services business in
the power plant segment remained active, and Wärtsilä received
several service contracts for power plants during the review period.

Wärtsilä's installed engine base in the Ship Power and Power Plant
markets totals over 160,000 MW and consists of thousands of
installations distributed throughout the world. Both end markets
consist of several customer segments for Services, and Wärtsilä's
portfolio is the broadest in the market. These factors limit the
impacts of fluctuations in any individual market or customer segment.

ORDER INTAKE
The order intake for the second quarter totalled EUR 785 million
(1,432) a decrease of 45%. The order intake for Ship Power totalled
EUR 67 million (467), 86% below the corresponding period last year.
During the second quarter Ship Power registered 31% of orders in the
Merchant segment and 24% in the Offshore segment. Orders from the
Navy segment represented 19% and orders from the Cruise&Ferry segment
12%. The Special vessels segment and Ship design each accounted for
7% of Ship Power's total order intake. Compared to the first quarter
2009 order intake fell by 47% (EUR 127 million during the first
quarter of 2009). For the review period January-June 2009 Ship
Power's order intake was EUR 194 million (1,224), a decrease of 84%
from the corresponding period last year.

The second quarter order intake for the Power Plants business
totalled EUR 257 million (556), which was 54% lower than in the
corresponding period last year. The largest orders for oil-fired
power plants were received from Chad, Malta and Yemen. The largest
orders for gas-fired power plant were received from Turkey. Timing of
order intake has become even more challenging due to the financial
crisis. Compared to the first quarter, order intake fell 20% (EUR 321
million in the first quarter of 2009).The order intake for the review
period January-June 2009 was EUR 577 million (1,122), which is 49%
lower than in 2008.

Order intake for the Services business totalled EUR 458 million (402)
in the second quarter, a growth of 14% compared to the corresponding
period 2008. During the second quarter Wärtsilä Services signed an
important Operations & Management contract in the Philippines.
Compared to the first quarter, order intake fell 10% (EUR 507 million
in the first quarter of 2009). Services' order intake for the review
period January-June totalled EUR 965 million (1,013), a reduction of
5% over the corresponding period in 2008.

For the review period January-June 2009 Wärtsilä's total order intake
amounted to EUR 1,743 million (3,368), which represents a reduction
of 48% compared to the corresponding period 2008.

ORDER BOOK
At the end of the review period Wärtsilä's total order book stood at
EUR 5,829 million (7,479), a decrease of 22%. The Ship Power order
book stood at EUR 3,602 million (4,841), -26%. Wärtsilä continuously
evaluates the firmness of the order book. During the review period
January-June 2009, cancellations of EUR 154 million materialised and
were deducted from the order book. The cancellations were mainly
within the Merchant segment but cancellations also materialised in
the Offshore and Special vessel segments. Wärtsilä sees a potential
cancellation risk of approximately EUR 800 million. The estimate at
the end of the previous quarter was EUR 1,000 million. At the end of
the review period, the Power Plants order book amounted to EUR 1,705
million (2,107), which is 19% lower than at the corresponding date
last year. The Services order book totalled EUR 522 million (530) at
the end of the review period, a decrease of 2%.


Second quarter order intake by business
MEUR                           4-6/2009 4-6/2008 Change
Ship Power                           67      467   -86%
Power Plants                        257      556   -54%
Services                            458      402    14%
Order intake, total                 785    1 432   -45%



Order intake Power Plants
MW                        4-6/2009 4-6/2008 Change
Oil                            426      617   -31%
Gas                             51      333   -85%
Renewable fuels                  0       47  -100%




Order intake for the review period by
business
MEUR                               1-6/2009 1-6/2008 Change 1-12/2008
Ship Power                              194    1 224   -84%     1 826
Power Plants                            577    1 122   -49%     1 883
Services                                965    1 013    -5%     1 858
Order intake, total                   1 743    3 368   -48%     5 573



Order intake Power Plants
MW                        1-6/2009 1-6/2008 Change 1-12/2008
Oil                            770    1 059   -27%     2 029
Gas                            294      876   -66%     1 240
Renewable fuels                  0       84  -100%        80



Order book by business
MEUR                   30 June 2009 30 June 2008 Change  2008
Ship Power                    3 602        4 841   -26% 4 486
Power Plants                  1 705        2 107   -19% 1 949
Services                        522          530    -2%   445
Order book, total           5 829*)        7 479   -22% 6 883


*) Cancellations amounting to EUR 154 million have been eliminated
from the order book during the review period January-June 2009.


NET SALES
During the second quarter, Wärtsilä's net sales increased by 22% to
EUR 1,333 million (1,092) compared to the corresponding period last
year. Net sales for Ship Power totalled EUR 479 million (365), a
growth of 31% compared to the corresponding period last year. Power
Plants' net sales for the second quarter totalled 379 million (273),
which is 39% higher than in the corresponding quarter last year. The
second quarter net sales for Services amounted to EUR 469 million
(454), a growth of 3%.

Wärtsilä's net sales for January-June 2009 grew strongly by 33% and
totalled EUR 2,574 million (1,942). Ship Power's net sales grew by
40% and totalled EUR 852 million (609). Net Sales for Power Plants
developed very strongly during the review period and totalled EUR 810
million (448), a growth of 81% compared to the corresponding period
last year. Net sales from the Services business grew 2% from last
year's high level and amounted to EUR 902 million (882). Net sales
were evenly spread between the businesses in the review period
January-June 2009. Ship Power accounted for 33%, Power Plants for 32%
and Services net sales for 35% of the total net sales.


Second quarter net sales by business
MEUR                                 4-6/2009 4-6/2008 Change
Ship Power                                479      365    31%
Power Plants                              379      273    39%
Services                                  469      454     3%
Net sales, total                        1 333    1 092    22%




Net sales for the review period by business
MEUR                               1-6/2009 1-6/2008 Change 1-12/2008
Ship Power                              852      609    40%     1 531
Power Plants                            810      448    81%     1 261
Services                                902      882     2%     1 830
Net sales, total                      2 574    1 942    33%     4 612


FINANCIAL RESULTS
The second quarter operating result before nonrecurring expenses was
EUR 155 million (124), representing 11.7% of net sales (11.4).
Wärtsilä recognised EUR 6 million of nonrecurring expenses related to
the adjustment measures taken within the Ship Power business.
Including these, the operating result for the second quarter totalled
EUR 149 million representing 11.2% of net sales. For the review
period January-June 2009, the operating result before the said
nonrecurring expenses rose to EUR 286 million (206), which is 11.1%
of net sales (10.6). Including the nonrecurring expenses the
operating result grew to EUR 280 million or 10.9% of net sales.
Financial items amounted to EUR -16 million (0). Net interest
totalled EUR -10 million (-5). Financial items developed negatively
due to the increase in interest expenses and the fair valuation of
foreign exchange hedging contracts. Dividends received totalled EUR 5
million (6). Profit before taxes amounted to EUR 263 million (206).
Taxes in the reporting period amounted to EUR -73 million (-61).
Earnings per share were EUR 1.90 (1.45).

BALANCE SHEET, FINANCING AND CASH FLOW
Wärtsilä's cash flow from operating activities was EUR -72 million
(207) in January-June 2009. Net cash generated by operating
activities is burdened by the net working capital being tied up in
high delivery volumes, and by lower advances received due to the
decrease in ordering activity. Net working capital at the end of the
period totalled EUR 591 million (107). Net working capital has
increased by EUR 324 million since the beginning of the year. The
increase comes mainly from the increase in inventories of EUR 166
million, and from EUR 223 million in trade receivables. Advances
received decreased by EUR 101 million. Advances received at the end
of the period totalled EUR 1,143 million (1,214). Net working capital
has been very low in 2007 and 2008 due to the high amount of advances
received and the long order book. Working capital management is one
of Wärtsilä's management's key focus areas going forward. Liquid
reserves at the end of the period amounted to EUR 118 million (143).

Net interest-bearing loan capital totalled EUR 759 million (267).
Wärtsilä had loans from financial institutions totalling EUR 890
million (422) at the end of June 2009. The existing funding
programmes include long term loans EUR 646 million, Committed
Revolving Credit Facilities totalling EUR 535 million and Finnish
Commercial Paper programmes totalling EUR 600 million. At the end of
the period non-utilised committed credit facilities totalled EUR 445
million. In addition Wärtsilä has agreed on a EUR 30 million
long-term loan that will be disbursed in August 2009. The total
amount of short-term debt maturing within the next 12 months is EUR
208 million.
The solvency ratio was 32.7% (36.7) and gearing was 0.61 (0.25).
HOLDINGS
Wärtsilä owns 7,270,350 B shares in Assa Abloy, or 2.0% of the total.
This holding has been booked in the balance sheet at its market value
at the end of the reporting period, EUR 72 million.

CAPITAL EXPENDITURE
Gross capital expenditure in the review period totalled EUR 72
million (87), which comprised EUR 15 million (14) in acquisitions and
investments in securities of which the Navim Diesel acquisition
accounts for the biggest share, and EUR 58 million (73) in production
and information technology investments. Depreciation amounted to EUR
61 million (42).

Due to the high delivery volumes, efficiency improvements, and
Services related logistical development plans, the total capital
expenditure excluding acquisitions for 2009, is expected to be
approx. EUR 180 million.

STRATEGIC ACQUISITIONS, JOINT-VENTURES AND EXPANSION OF NETWORK
Wärtsilä continued expanding its Service network with the
inauguration of a new Wärtsilä Land & Sea Academy training centre and
new modern service premises in the Netherlands as well as new office
and workshop facilities in the city of Veracruz in Mexico.
In May, Wärtsilä acquired 60% of the shares of Wärtsilä Navim Diesel
of Italy, thus increasing its ownership of the company to 100%.
Wärtsilä Navim Diesel, which specialises in marine sales and service,
has a strong market position, particularly in the Cruise & Ferry
segment. The transaction resulted in EUR 8 million of new goodwill.
MANUFACTURING
In April, Wärtsilä together with China Shipbuilding Industry
Corporation (CSIC) and Mitsubishi Heavy Industries (MHI) inaugurated
a jointly owned, low-speed marine engine factory QMD in Qingdao,
Shandong Province, China. The joint venture company Qingdao Qiyao
Wartsila MHI Linshan Marine Diesel Co. Ltd. (QMD) is owned jointly by
CSIC (50%), Wärtsilä Corporation (27%) and MHI (23%).

In May, Wärtsilä and 3. Maj Shipbuilding Industry Ltd. of Croatia
signed a ten-year renewal of the existing licence agreement for the
marketing, sale, manufacturing and servicing of Wärtsilä low-speed
marine diesel engines.

An important milestone was reached for the Wärtsilä 32 engine with
the 6000th engine being rolled out of the factory in Vaasa, Finland.

RESEARCH & DEVELOPMENT
In June, Wärtsilä inaugurated its Manufacturing Technology Center
(MTC) in Vaasa, Finland. The MTC is dedicated to securing and further
developing the company's manufacturing competencies, and to sharing
manufacturing know-how throughout the global Wärtsilä network.

PERSONNEL
In May Wärtsilä Ship Power announced that it had initiated the formal
process to reduce 400-450 jobs. The negotiations were initiated to
adjust to the substantially weakened global marine market situation.
The annual savings from these measures will be approximately EUR 30
million. The effect of the savings will start to materialise
gradually from the second half of 2009, and will take full effect by
the end of 2010. In the second quarter Wärtsilä recognised EUR 6
million of nonrecurring expenses in its operating result related to
the adjustment measures taken in the Ship Power business.

In Finland, the co-operation negotiations, which ended in June,
resulted in the reduction of 77 jobs. The major part of these job
reductions will be implemented through internal job transfers within
the company and by the expiration of temporary employment contracts.
As a result of the negotiations 28 Ship Power employees in Finland
are under threat of redundancy. Similar negotiations have also come
to an end in several other countries. In the remaining countries, the
adjustment process is proceeding as planned. Altogether, Wärtsilä
Ship Power employs sales, project management, engineering services
and ship design personnel in 30 countries.

Wärtsilä had 19,016 (17,552) employees at the end of June. The
average number of personnel during January-June 2009 totalled 18,910
(17,084). Services had 11,316 employees (10,394), a growth of 9%.

SUSTAINABLE DEVELOPMENT
The global strive for sustainable and environmentally sound
development is an important demand driver for Wärtsilä. Increased
environmental concerns and more stringent regulations both globally
and locally put pressure on the marine industry to constantly
investigate new ways of reducing the environmental impact of ships.
Greenhouse gas emission reduction continues to drive change also in
the energy sector. Wärtsilä is well positioned to reduce sea
transport emissions and greenhouse gas emissions with its various
technologies and specialised services.

CHANGES IN MANAGEMENT
The following appointments have been made to Wärtsilä Corporation's
Board of Management, with effect from 1 August 2009:
Christoph Vitzthum (40) MSc (Econ.) has been appointed Group Vice
President, Services. Tage Blomberg, the current Group Vice President,
Services, will in line with his employment contract retire during
2009.
Vesa Riihimäki (43) MSc (Eng.) has been appointed Group Vice
President, Power Plants and a member of the Board of Management.

SHARES AND SHAREHOLDERS

SHARES ON HELSINKI EXCHANGES

30 June 2009                  Number of  Number of   Number of shares
                                                               traded
                                 shares      votes           1-6/2009
WRT1V                        98 620 565 98 620 565         82 569 753

1 Jan. -30 June 2009               High        Low   Average 1) Close
 Share price                      30.91      15.81        21.78 22.94
1) Trade-weighted average price.

                                           30 June 30 June 2008
                                              2009
Market capitalisation, EUR                   2 262        3 940
million
Foreign shareholders                         46.1%        50.0%



DECISIONS TAKEN BY THE ANNUAL GENERAL MEETING
Wärtsilä's Annual General Meeting held on 11 March 2009 approved the
financial statements and discharged the members of the Board of
Directors and the company's President & CEO from liability for the
financial year 2008. The Meeting approved the Board of Directors'
proposal to pay a dividend of EUR 1.50 per share totalling EUR 148
million. Dividends were paid on 23 March 2009.

The Annual General Meeting decided that the Board of Directors shall
have six members. The following were elected to the Board: Ms Maarit
Aarni-Sirviö, Mr Kaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr Antti
Lagerroos, Mr Bertel Langenskiöld and Mr Matti Vuoria.

The firm of authorised public accountants KPMG Oy Ab, was appointed
as the company's auditors.

Organisation of the Board of Directors
The Board of Directors of Wärtsilä Corporation elected Antti
Lagerroos as its chairman and Matti Vuoria as the deputy chairman.
The Board decided to establish an Audit Committee, a Nomination
Committee and a Compensation Committee. The Board appointed from
among its members, the following members to the Committees:

Audit Committee:
Antti Lagerroos, chairman
Maarit Aarni-Sirviö
Bertel Langenskiöld

Nomination Committee:
Antti Lagerroos, chairman
Matti Vuoria
Kaj-Gustaf Bergh

Compensation Committee:
Antti Lagerroos, chairman
Matti Vuoria
Bertel Langenskiöld

RISKS AND BUSINESS UNCERTAINTIES
Due to the uncertainty in the shipping industry, the main risks in
Ship Power remain the slippage of shipyard delivery schedules, as
well as the risk of cancellation of existing orders. Wärtsilä Ship
Power sees a potential cancellation risk of approximately EUR 800
million. The estimate at the end of the previous quarter was EUR
1,000 million.

The market risks in the Power Plant business remain unchanged. The
current financial crisis has some effect on the timing of orders. The
actual impact of the financial crisis is still small, but the
possible effect on orders in the pipeline is difficult to predict.
The financing of many future projects appears secure, and there is an
increased level of activity from utilities and governmentally funded
power producers.

In Services, the biggest risks still relate to a further
deterioration of the underlying shipping industry leading to larger
scale lay-ups of ships, which could reduce demand for maintenance and
services within this segment. During the second quarter, business
activity in Services remained stable.

The current market situation has impacted the whole supply chain and
Wärtsilä is monitoring the stability of its supplier base. The risk
level has not significantly changed during the period. The supply
chain is becoming more flexible with a shortening of lead times, in
order to effectively respond to the rapid changes in the market.


MARKET OUTLOOK
The shipping markets have been at a virtual standstill for more or
less 9 months now, and a quick recovery seems unlikely. Record low
freight rates and expensive fuel costs have penalised many operators
and have led to financial difficulties. Various measures are being
taken by players in the market in order to mitigate the current risks
in the marine industry. There is a lot of national interest involved
as shipbuilding represents a significant employer in many nations.
Consequently, all the major shipbuilding nations have launched
national support packages for their shipyards. Industry consolidation
among ship owners will also follow as weaker players get taken over
by bigger and more solid ship owners.

It is still questionable if the recent increase in oil prices has
been based on demand driven factors. In the mid-term, however, new
investments in the offshore segment are expected to be activated as
the industry moves to deeper waters and other unconventional oil and
gas exploration areas.

In the short term, the market will continue focusing on specialised
tonnage, whereas conventional volume segments, such as container
vessels and bulk carriers, are expected to continue at a standstill.
Wärtsilä's core business is clearly within the more specialised
tonnage. During the latter part of 2009 the market in general is
expected to become slightly more active.

The demand in the Power Plants market remains at a good level, but
the timing of orders in dependent on the availability of financing.
The fundamental global need for a more flexible, efficient, and
environmentally friendly power generation mix remains and continues
to position Wärtsilä well for the future. The quest for increased
efficiency and better energy security through fuel versatility and
flexibility, are trends that clearly work in Wärtsilä's favour. The
flexible baseload segment is forecasted to remain active throughout
the Middle East, Africa and the Americas. Increased interest in grid
stability and peaking solutions in North America and throughout the
developed world can be seen, whereas less activity is shown in the
industrial self-generation segment. Power Plants ordering activity is
expected to be at a good, albeit lumpy level.

Services continues its stable development, but due to the uncertainty
within the marine industry, visibility has become shorter.

WÄRTSILÄ'S PROSPECTS FOR 2009 REITERATED
Despite the risk of cancellations and the nonrecurring restructuring
items booked in the second quarter, the substantial order book should
support a 10-20 percent growth in net sales for 2009, which would
maintain profitability at last year's good level.

WÄRTSILÄ INTERIM REPORT JANUARY - JUNE 2009
This interim financial report is prepared in accordance with IAS 34
(Interim Financial Reporting) using the same accounting policies and
methods of computation as in the annual financial statements for
2008. All figures in the accounts have been rounded and consequently
the sum of individual figures can deviate from the presented sum
figure.

Use of estimates
The preparation of the financial statements in accordance with IFRS
requires management to make estimates and assumptions that affect the
valuation of the reported assets and liabilities and other
information, such as contingent liabilities and the recognition of
income and expenses in the income statement. Although the estimates
are based on the management's best knowledge of current events and
actions, actual results may differ from the estimates.

IFRS amendments
Of the amended International Financial Reporting Standards (IFRS) and
interpretations mandatory as of 1 January 2009 the following are
applicable to the Group reporting:
-          IFRS 8 Operating Segments
-          IAS 23 Borrowing Cost
-          IAS 1 Presentation of financial Statement
-          IFRIC 16 Hedges of Net Investment in a foreign Operation
The adaption of the revised standards and interpretations does not
have any material effect on the interim report.


This interim report is unaudited.


CONDENSED INCOME STATEMENT
MEUR                                        1-6/2009  1-6/2008   2008
Net sales                                      2 574     1 942  4 612
Other income                                      19        10     26
Expenses                                      -2 254    -1 706 -4 015
Depreciation and impairment                      -61       -42    -99
Share of profit of associates and joint
ventures                                           2         1
Operating result                                 280       206    525
Financial income and expenses                    -16               -9
Profit before taxes                              263       206    516
Income taxes                                     -73       -61   -127
Profit for the financial period                  190       145    389

Attributable to:
Owners of the parent                             187       142    380
Non-controlling interest                           3         4      9
Total                                            190       145    389


Earnings per share attributable to equity holders of the
parent company:
Earnings per share, EUR                         1.90      1.45   3.88
Diluted earnings per share, EUR                 1.90      1.45   3.88


STATEMENT OF COMPREHENSIVE INCOME
Profit for the financial period                  190       145    389
Other comprehensive income after tax:
Exchange differences on translating
foreign operations                                 5        -6    -27
Investments available for sale                    10       -27    -37
Cash flow hedges                                  12        18    -44
Share of other comprehensive income of associates and joint
ventures                                                           -1
Other income/expenses                                               6
Other comprehensive income for the period         28       -15   -103

Total comprehensive income for the period        219       130    286

Total comprehensive income attributable
to:
Owners of the parent                             214       127    277
Non-controlling interest                           5         3      9
                                                 219       130    286



CONDENSED BALANCE SHEET
MEUR                           30 June 2009 30 June 2008 31 Dec. 2008
Non-current assets
Intangible assets                       801          648          793
Property, plant and equipment           462          388          446
Equity in associates and joint
ventures                                 48           42           41
Investments available for sale          118          121          106
Deferred tax receivables                 80           69           85
Other receivables                        25           17           26
                                      1 536        1 285        1 498
Current assets
Inventories                           1 823        1 503        1 656
Other receivables                     1 522        1 124        1 392
Cash and cash equivalents               118          143          197
                                      3 463        2 770        3 245

Assets                                4 998        4 055        4 743



Shareholders' equity
Share capital                                         336   336   336
Other shareholders' equity                            915   698   848
Total equity attributable to equity holders of the
parent                                              1 251 1 034 1 184

Minority interest                                      12    11    15
Total shareholders' equity                          1 262 1 044 1 199

Non-current liabilities
Interest-bearing debt                                 682   335   448
Deferred tax liabilities                               86    76    86
Other liabilities                                     281   841   394
                                                    1 049 1 251   927
Current liabilities
Interest-bearing debt                                 208    86   216
Other liabilities                                   2 479 1 674 2 400
                                                    2 687 1 759 2 616

Total liabilities                                   3 736 3 010 3 544

Shareholders' equity and liabilities                4 998 4 055 4 743



CONDENSED CASH FLOW STATEMENT
MEUR                                          1-6/2009  1-6/2008 2008
Cash flow from operating activities:
Profit before taxes                                263       206  516
Depreciation and impairment                         61        42   99
Financial income and expenses                       16        -1    9
Selling profit and loss of fixed assets and
other adjustments                                   -6        -5    2
Share of profit of associates and joint
ventures                                            -2        -2
Changes in working capital                        -305         6 -250
Cash flow from operating activities before
financial items and taxes                           28       247  377
Net financial items and income taxes              -100       -40  -99
Cash flow from operating activities                -72       207  278

Cash flow from investing activities:
Investments in shares and acquisitions             -15       -14 -198
Net investments in tangible and intangible
assets                                             -58       -68 -168
Proceeds from sale of shares                       -20         1   30
Cash flow from other investing activities            3         6    8
Cash flow from investing activities                -90       -75 -329

Cash flow from financing activities:
New long-term loans                                239       100  260
Amortization and other changes in long-term
loans                                                        -10   -4
Changes in short term loans and other
financing activities                                -2        54  129
Dividends paid                                    -156      -410 -412
Cash flow from financing activities                 81      -266  -26

Change in liquid funds, increase (+) /
decrease (-)                                       -80      -135  -76


Cash and cash equivalents at beginning of
period                                             197       296  296
Joint ventures' cash and cash equivalents at beginning
of period                                                    -13  -18
Fair value adjustments, investments                            1    1
Exchange rate changes                                1        -6   -6
Cash and cash equivalents at end of period         118       143  197



  STATEMENT OF CHANGES IN
  SHAREHOLDERS' EQUITY
                Total equity attributable to equity holders
  MEUR          of the parent                                 Minority  Total
                                                              interest equity
                                                Fair
                          Share                value
                                                 and
                  Share   issue Translation    other Retained
                capital premium differences reserves earnings
  Shareholders'
  equity on 1
  January 2009      336      61         -27       50      764       15  1 199
  Dividends                                              -148       -8   -156
  Total
  comprehensive
  income for
  the period                              9       18      187        5    219
  Shareholders'
  equity on 30
  June 2009         336      61         -18       68      803       12  1 262

  Shareholders'
  equity on 1
  January 2008      336      61           3      127      788       10  1 325
  Dividends                                              -408       -2   -410
  Total
  comprehensive
  income for
  the period                             -5      -10      142        3    129
  Shareholders'
  equity on 30
  June 2008         336      61          -2      117      522       11  1 044

Geographical
distribution of
net sales                Europe        Asia    Americas    Other        Group
MEUR
Net sales
1-6/2009                    792         947         537      298        2 574
Net sales
1-6/2008                    699         773         315      155        1 942



INTANGIBLE ASSETS AND PROPERTY, PLANT & EQUIPMENT
MEUR                                        1-6/2009  1-6/2008 2008
Intangible assets
Book value at 1 January                          793       646  646
Changes in exchange rates                         14        -5  -30
Acquisitions                                      12         8  191
Additions                                          8        14   29
Depreciation and impairment                      -29       -16  -42
Disposals and intra-balance sheet transfer         2             -1
Book value at end of period                      801       648  793

Property, plant and equipment
Book value at 1 January                          446       377  377
Changes in exchange rates                          1        -1   -3
Acquisitions                                       1         3    9
Additions                                         49        58  139
Depreciation and impairment                      -32       -26  -57
Joint ventures' opening balances                           -17   -6
Disposals and intra-balance sheet transfer        -3        -6  -13
Book value at end of period                      462       388  446



GROSS CAPITAL EXPENDITURE
MEUR                                          1-6/2009  1-6/2008 2008
Investments in securities and acquisitions          15        14  198
Intangible assets and property, plant and
equipment                                           58        73  168
Group                                               72        87  366



During the review period investment in the enlargement of propulsion
equipment manufacturing in the Netherlands and China amounted to EUR
5 million, and Wärtsilä had commitments related to the enlargements
amounting to EUR 2 million at the end of the review period. Wärtsilä
centralises warehousing and logistics of spare parts by investing in
a new distribution centre in the Netherlands. The commitments
related to the new distribution centre amounted to EUR 56 million at
the end of the review period.



INTEREST-BEARING LOAN CAPITAL
MEUR                          30 June 2009 30 June 2008 31 Dec. 2008
Long-term liabilities                  682          335          448
Current liabilities                    208           87          216
Loan receivables                       -14          -12          -12
Cash and bank balances                -118         -143         -197
Net                                    759          267          455



FINANCIAL RATIOS         1-6/2009  1-6/2008  2008
Earnings per share, EUR      1.90      1.45  3.88
Equity per share, EUR       12.68     10.48 12.01
Solvency ratio, %            32.7      36.7  34.3
Gearing                      0.61      0.25  0.39



PERSONNEL
                  1-6/2009  1-6/2008   2008
On average          18 910    17 084 17 623
At end of period    19 016    17 552 18 812



CONTINGENT LIABILITIES
MEUR                           30 June 2009 30 June 2008 31 Dec. 2008
Mortgages                                56           13           61
Chattel mortgages                        10            7           10
Total                                    66           21           71

Guarantees and contingent
liabilities
on behalf of Group companies            647          463          664
Nominal amount of rents
according
to leasing contracts                     67           71           87
Total                                   714          534          751



NOMINAL VALUES OF DERIVATIVE INSTRUMENTS
MEUR                               Total amount of which closed
Interest rate swaps                          90
Foreign exchange forward contracts        1 407             238
Currency options, purchased                  43



COMMODITY DERIVATIVES   Amount in of which
                      metric tons   closed
Oil swaps                   4 275
Copper futures                300



CONDENSED INCOME
STATEMENT, QUARTERLY
MEUR            4-6/2009 1-3/2009 10-12/2008 7-9/2008 4-6/2008 1-3/2008
Net sales          1 333    1 241      1 530    1 140    1 092      850
Other income          13        5         10        6        5        5
Expenses          -1 167   -1 087     -1 313     -996     -953     -753
Depreciation
and impairment       -30      -30        -31      -26      -21      -21
Share of profit
of associates
and joint
ventures               1        1          1       -1        1
Operating
result               149      130        197      123      124       81
Financial
income and
expenses              -9       -7        -14        5        7       -7
Profit before
taxes                141      123        183      127      131       75
Income taxes         -39      -34        -36      -30      -36      -25
Profit for the
financial
period               102       89        147       97       96       49

Attributable
to:
Owners of the
parent               100       87        144       95       94       47
Non-controlling
interest               2        1          3        3        2        2
Total                102       89        147       97       96       49

Earnings per share attributable
to equity holders of the parent
company:
Earnings per
share, EUR          1.01     0.89       1.46     0.97     0.96     0.49



CALCULATION OF FINANCIAL RATIOS

Earnings per share (EPS)
Profit for the financial period attributable to equity holders of the
parent company
Adjusted number of shares over the financial year

Equity per share
Equity attributable to equity holders of the parent
company
Adjusted number of shares at the end of the period

Solvency ratio
Shareholders' equity                                  x 100
Balance sheet total - advances received

Gearing
Interest-bearing liabilities - cash and bank balances
Shareholders' equity


21 July 2009
Wärtsilä Corporation
Board of Directors


This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.