INTERIM REPORT JANUARY - JUNE 2008

Wärtsilä Corporation INTERIM REPORT 24 July 2008 at 8.30 local time

ORDER INTAKE CONTINUED ON HIGH LEVEL - STRONG PROFITABILITY

SECOND-QUARTER HIGHLIGHTS
- Order intake grew 5% to EUR 1,432 million (1,369)
- Strong activity in Power Plants offset lower order intake in Ship
Power
- Net sales grew 37% to EUR 1,092 million (797)
- Operating income (EBIT) grew 67% to EUR 122 million, or 11.2% of
net sales (EUR 73 million and 9.2%)
- Earnings per share amounted to 0.96 (0.54)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-JUNE 2008
- Order intake EUR 3,368 million (2,526), growth 33%
- Order book total EUR 7,479 million (5,460), growth 37%
- Net sales EUR 1,942 million (1,558), growth 25%
- Operating result EUR 204 million (136), growth 49%
- Profitability 10.5% (8.8)
- Earnings per share amounted to 1.45 (0.98)
- Strong cash flow from operating activities EUR 207 million (129)

OLE JOHANSSON, PRESIDENT AND CEO:
"Net sales for the period January-June 2008 grew by 25% to EUR 1,942
million and profitability reached 10.5%. Wärtsilä's total order
intake grew strongly by 33 % to reach EUR 3,368 million for the
review period. The Power Plant markets continued to be very active
with strong growth in order intake. In Ship Power, the decline in new
vessel ordering that started at the end of last year has affected
order intake during the second quarter, slightly earlier than
expected. This has allowed us to allocate more capacity to respond to
the strong demand we are facing in the Power Plant market. Current
conditions in the shipbuilding market have led to visibility becoming
shorter. During the third quarter we expect Ship Power's ordering
activity to continue at the same good levels as during the second
quarter. In the fourth quarter some slowdown is foreseen. We expect
activity in the Power Plant market to continue to be very strong with
no signs of a slowdown. The long order book and our flexible
manufacturing model, in combination with the solid growth in Services
provide our business with stability and the ability to adapt well to
the fluctuating market conditions."

WÄRTSILÄ'S PROSPECTS FOR 2008 REITERATED
Based on the strong order book, Wärtsilä's net sales are expected to
grow by about 25% in 2008. Wärtsilä's profitability varies
considerably from one quarter to another. The full-year operating
margin will exceed 11%.

ANALYST AND PRESS CONFERENCE
An analyst and press conference will be held on Thursday 24 July
2008, at the Wärtsilä headquarters in Helsinki, Finland. Please note
that the conference will be starting half an hour earlier than usual
at 10.15 a.m. Finnish time (8.15 a.m. UK time). The combined web- and
teleconference can be viewed on the Internet at the following
address:


http://194.100.179.139:80/wip/directlink.do?newbrowser=1&pid=2337750.
To participate in the teleconference please call: [phone]
0125 and enter the Conference ID: 801875. If you want to ask
questions during the teleconference, press the number 1 on your phone
to register for a question and the hash or pound key to withdraw a
question. The event title for the call is: Wärtsilä Results Q2 2008,
please be ready to state your details and the name of the conference
to the operator. Should problems occur, please press the 0-button.


Wärtsilä Corporation



Wärtsilä in brief
Wärtsilä enhances the business of its customers by providing them
with complete lifecycle power solutions. When creating better and
environmentally compatible technologies, Wärtsilä focuses on the
marine and energy markets with products and solutions as well as
services. Through innovative products and services, Wärtsilä sets out
to be the most valued business partner of all its customers. This is
achieved by the dedication of over 17,000 professionals manning 160
Wärtsilä locations in close to 70 countries around the world.

INTERIM REPORT JANUARY-JUNE 2008

The figures in this interim report are unaudited.


SECOND QUARTER 4-6/2008 IN BRIEF


MEUR                4-6/2008 4-6/2007 Change
Order intake           1 432    1 369     5%
Net sales              1 092      797    37%
Operating result         122       73    67%
% of net sales         11.2%     9.2%
Profit before taxes      132       72
Earnings/share, EUR     0.96     0.54



REVIEW PERIOD JANUARY - JUNE 2008 IN BRIEF


MEUR                                1-6/2008 1-6/2007 Change  2007
Order intake                           3 368    2 526    33% 5 633
Order book, 30 June                    7 479    5 460    37% 6 308
Net sales                              1 942    1 558    25% 3 763
Operating result                         204      136    49%   379
% of net sales                         10.5%     8.8%        10.1%
Profit before taxes                      206      132          372
Earnings/share, EUR                     1.45     0.98         2.74
Cash flow from operating activities      207      129          431
Interest-bearing net debt
at the end of the period                 254      178          -27
Gross capital expenditure                 87      112          231



MARKET DEVELOPMENT

SHIP POWER
During the second quarter the trend of lower new vessel ordering
continued, bringing the market to the same level as in 2003 and 2004
in terms of the number of new vessels ordered. As demand has remained
relatively stronger in bigger tonnage vessels, the overall market
size measured in tonnage is at 2006 levels. The global uncertainty
has clearly impacted investments in new vessels, as well as plans to
invest in new yards.

Following the somewhat slower first quarter of this year for Chinese
shipyards, China has regained its leading position during the second
quarter in terms of new vessel orders. For the first part of 2008,
China's share of new vessels ordered was 41% and Korea's 37%.
Europe's share of the market was approximately 10% and Japan's 4%.
Other countries accounted for 8% of new orders. Measured in tonnage,
Korea is clearly dominant with almost 60% of the market. This is due
to the market's concentration on bigger tonnage for which Korean ship
yards are most suited. As regards new orders for larger size vessels,
June was the strongest ordering month so far, and after the dry bulk
boom, there has been an increase in demand for big container vessels
and tankers. Demand for bulk carriers has continued, driven by the
attractive development in freight rates. Demand in the offshore
segment during the period focused mainly on anchor handlers and
bigger tonnage for deeper waters. The Brazilian oil discoveries, as
well as Petrobras' announcement of its intention to significantly
increase the size of its fleet, are very positive signals to the
market. Demand in the Cruise&Ferry segment remained steady, while in
the Special vessel segment demand was strongest for tug boats.

Ship Power market shares
Wärtsilä's market share for medium speed main engines declined to 32%
(36 at the end of the previous quarter). This is mainly due to the
slowdown in demand of the North Sea offshore market where Wärtsilä
has a strong position. Wärtsilä's market share for low speed engines
increased to 16% (13) due to the success of the company's medium size
low speed engine series. The market share for auxiliary engines
increased slightly to 8% (6) as a result of the positive trend in the
Chinese market.

POWER PLANTS
The market for efficient and flexible power plants continued to
remain globally active during the review period. The ongoing
environmental debate and the need to find highly efficient power
generation solutions is clearly beneficial to Wärtsilä.  Demand for
new production capacity remains strong as does the need to increase
efficiency and versatility in power generation due to high fuel
prices. Strong business fundamentals are continuing to generate high
levels of activity in all the power plant segments relevant to
Wärtsilä - flexible baseload production, industrial self-generation,
grid stability and peaking, as well as power solutions for the oil
and gas industry.

SERVICES
Increasing energy prices, together with new and more stringent
environmental legislation, are driving machinery development towards
more complex technologies and advanced control systems. Maintaining,
tuning or upgrading this equipment for optimal efficiency and
emission compliance requires highly skilled specialists that aren't
always available to the market. The lack of skilled resources in the
marine, oil & gas as well as energy industries, is resulting in
increased demand for services provided by equipment suppliers.

ORDER INTAKE AND ORDER BOOK
The order intake for the second quarter continued to be strong,
totalling EUR 1,432 million (1,369) and representing growth of 5%.
The order intake for Ship Power was at a good level and totalled EUR
467 million (673) for the second quarter of 2008, 31% lower than the
corresponding period last year. This is partially a reflection of the
slowdown in the shipbuilding market that started at the beginning of
2008, which has affected Wärtsilä Ship Power earlier than expected,
and partially due to capacity limitations. More capacity has been
allocated to respond to the strong demand in the Power Plant market.
For the review period January-June 2008 Ship Power's order intake was
EUR 1,224 million (1,194), a 3% growth from the corresponding period
last year. Merchant vessel orders continued to be dominant with 50%
of total Ship Power orders, with orders for general cargo and bulkers
being the strongest within this segment. Offshore segment orders
represented 25%, Special vessels and Cruise&Ferry had 11% and 10% of
orders received whereas Navy received 4% of the total Ship Power
orders for the review period.

Order intake for the Power Plants business continued to be very
strong during the second quarter and totalled EUR 556 million (326),
70% higher than during the corresponding period last year. During the
second quarter the largest oil-fired power plant orders were received
from Pakistan and from Brazil. The latest Brazilian order followed
two others, signed in March 2008. Wärtsilä sees further potential in
these important markets. The largest gas power plant orders were
received from Togo and Turkey. The quarter also marked a milestone
for Wärtsilä with the receipt of an order for a combined heat and
power (CHP) plant that will run on the liquid biofuel extracted from
the seeds of the jatropha plant. This CHP plant will be the first
power plant in the world ever to produce both electricity and heat
using crude jatropha oil as the fuel and is yet another important
step in the development of Wärtsilä's fuel flexibility.
For the review period January-June 2008 the Power Plants order intake
totalled EUR 1,122 million (537), a 109% growth compared to the
corresponding period last year.

During the second quarter the Services business received several
larger contracts such as operations & maintenance contracts in
Madagascar and Brazil, the supply of a main switch board of an ARAMCO
Jack Up / Heavy Lift Platform, and the thruster conversion of the
Seillean vessel in Brazil. Among others, these orders confirm the
suitability of Wärtsilä's Services offering to the needs of the
market. Order intake for the Services business totalled EUR 402
million (369) during the second quarter.
Services' order intake for the review period January-June totalled
EUR 1,013 million (792), a 28% growth over the corresponding period
in 2007.

For the review period January-June 2008 Wärtsilä's total order intake
amounted to EUR 3,368 million (2,526), a growth of 33%. At the end of
the review period Wärtsilä's total order book stood at a new record
level of EUR 7,479 million (5,460),a growth of 37%. Ship Power order
book stood at EUR 4,841 million (3,681), a growth of 31%.The Power
Plants order book grew by 55% compared to the corresponding period
last year and amounting to 2,107 million (1,361). The Services order
book totalled EUR 530 million (416) at the end of the review period,
a growth of 27%.



Second quarter order intake by business
MEUR                           4-6/2008 4-6/2007 Change
Ship Power                          467      673   -31%
Services                            402      369     9%
Power Plants                        556      326    70%
Order intake, total               1 432    1 369     5%



Order intake Power Plants
MW                        4-6/2008 4-6/2007 Change
Oil                            617      313    97%
Gas                            333      236    41%
Renewable fuels                 47      114   -59%



Order intake for the review period by business
MEUR                                  1-6/2008 1-6/2007 Change  2007
Ship Power                               1 224    1 194     3% 2 600
Services                                 1 013      792    28% 1 607
Power Plants                             1 122      537   109% 1 421
Order intake, total                      3 368    2 526    33% 5 633



Order intake Power Plants
MW                        1-6/2008 1-6/2007 Change  2007
Oil                          1 059      443   139% 1 358
Gas                            876      358   145% 1 005
Renewable fuels                 84      317   -73%   483



Order book by business
MEUR                   30 June 2008 30 June 2007 Change  2007
Ship Power                    4 841        3 681    31% 4 292
Services                        530          416    27%   405
Power Plants                  2 107        1 361    55% 1 608
Order book, total             7 479        5 460    37% 6 308


NET SALES
During the second quarter Wärtsilä's net sales increased by 37% to
EUR 1,092 million (797) compared to the corresponding period last
year. Net sales for Ship Power totalled EUR 365 million (305), a
growth of 20% compared to the corresponding period last year. Power
Plants' net sales for the second quarter totalled 273 million (112),
which is 143% higher than in the corresponding quarter last year. The
second quarter net sales for Services amounted to EUR 454 million
(374), a growth of 21%, out of which 20% was organic growth.

Wärtsilä's net sales for January-June 2008 totalled EUR 1,942 million
(1,558), a growth of 25%. Ship Power net sales grew by 8% and
totalled EUR 609 million (561). Net sales for Power Plants developed
favourably during the review period and totalled 448 million (262),
which represents a growth of 71% compared to the corresponding period
last year. Net sales from the Services business increased to EUR 882
million (726), a growth of 22%. Organic growth represented 20% of
Services' net sales growth. For the review period January-June 2008
Ship Power net sales accounted for 31%, Services net sales for 45%,
and Power Plants for 23% of the total net sales.


Second quarter net sales by business
MEUR                                 4-6/2008 4-6/2007 Change
Ship Power                                365      305    20%
Services                                  454      374    21%
Power Plants                              273      112   143%
Net sales, total                        1 092      797    37%



Net sales for the review period by business
MEUR                               1-6/2008 1-6/2007 Change  2007
Ship Power                              609      561     8% 1 320
Services                                882      726    22% 1 550
Power Plants                            448      262    71%   882
Net sales, total                      1 942    1 558    25% 3 763


FINANCIAL RESULTS
The operating result for the second quarter amounted to EUR 122
million (73) or 11.2% (9.2) of net sales. The operating result for
the review period January-June 2008 rose to EUR 204 million (136),
which is 10.5% of net sales (8.8). Financial items amounted to EUR +1
million (-5). Net interest totalled EUR -5 million (-6). Dividends
received totalled EUR 6 million (6). Profit before taxes amounted to
EUR 206 million (132). Taxes in the review period amounted to EUR -61
million (-37). Earnings per share were EUR 1.45 (0.98).

BALANCE SHEET, FINANCING AND CASH FLOW
Cash flow from operating activities for January-June 2008 was strong
and totalled EUR 207 million (129).
Liquid reserves at the end of the period amounted to EUR 156 million
(133). Net interest-bearing loan capital amounted EUR 254 million
(178). Advance payments at the end of the period totalled EUR 1,214
million (810). The solvency ratio was 36.7% (44.3) and gearing was
0.25 (0.18).

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 67 million.

CAPITAL EXPENDITURE
Gross capital expenditure in the review period totalled EUR 87
million (112), which comprised EUR 14 million (43) in acquisitions
and investments in securities, and EUR 73 million (69) in production
and information technology investments. Depreciation for the review
period amounted to EUR 42 million (37).

Due to strong volume growth, the total capital expenditure excluding
acquisitions for 2008 is expected to be approx. EUR 200 million.

STRATEGIC ACQUISITIONS, JOINT-VENTURES AND EXPANSION OF THE NETWORK
In March Wärtsilä signed an agreement to acquire the Norwegian
company Maritime Service AS, which specializes in ship service, and
mechanical and reconditioning services. Maritime Service has its
operations in Ã…lesund, on the west coast of Norway. The annual net
sales of Maritime Service were 26 million NOK (EUR 3.2 million) in
2007.

In April Wärtsilä acquired the Danish company International
Combustion Engineering A/S (I.C.E.) that specializes in project
engineering and the service and repair of steam boilers and ancillary
burner systems. The company's annual net sales amounted to 46.8
million Danish crowns (EUR 6.3 million) in 2007. This acquisition
expands Wärtsilä's service offering into the new category of boiler
services. The new service category further improves Wärtsilä's
competitiveness as a leading total services provider. Wärtsilä
continued to expand its boiler services capability with the
acquisition of the boiler services business of I.C.E.'s former
subsidiary in Dubai in June.

In June Wärtsilä acquired the German company Claus D. Christophel
Mess- und Regeltechnik GmbH (CDC), which specializes in the design,
delivery and service of automation systems for ship owners and yards.
CDC's annual net sales were EUR 2.1 million in 2007.

The total price of the above three acquisitions was EUR 11 million,
out of which EUR 5 million is reported as goodwill.

During the review period Wärtsilä Services continued the expansion of
its network by opening and expanding offices and workshops in
Namibia, Chile, Brazil, Madagascar, Azerbaijan, China, Turkey and
Dubai. Geographical expansion continues to be part of Wärtsilä's
strategic focus, and acquisitions to this effect will continue.

STRATEGIC ACQUISITIONS AFTER THE REVIEW PERIOD
On July 3 2008 Wärtsilä signed an agreement to acquire the global
ship design group Vik-Sandvik, a leading independent group providing
design and engineering services to ship owners and the ship building
industry worldwide. This acquisition is a major step in Wärtsilä's
strategy to strengthen its position as a total solutions provider and
to be the most valued partner for its customers. By combining ship
design capability with its existing offerings in propulsion systems
and automation, Wärtsilä will be able to provide more added value to
its customers, with further growth potential in new lifecycle
services. Wärtsilä's goal is to become the leading provider of ship
design services in various segments.

The value of the acquisition was EUR 132 million, with an additional
maximum sum of EUR 38 million to be paid based on the performance of
the business over the next three years. In 2007, Vik-Sandvik's
turnover was EUR 55 million and the profitability is at a very good
level. The number of employees is 410. The acquisition is subject to
relevant regulatory approvals, which are expected during the third
quarter of 2008.

OTHER STRATEGIC ISSUES
In May Wärtsilä announced its intention to strengthen its
international customer service by centralizing its spare parts
logistics and by building a new spare parts distribution centre in
the Netherlands. A large and modern central warehouse is planned near
the company's current service unit in the Netherlands. Wärtsilä will
invest approximately EUR 70 million in the new distribution centre
and related logistics systems. The investments will be spread over
three years from 2008 to 2010. The intention is to outsource
logistics and warehousing operations.
Wärtsilä and Emerson Process Management announced the expansion of
their global offshore alliance in June. Under the expansion, the
companies can now deliver integrated energy and automation systems
for Floating Production Storage and Offloading vessels and for semi
submersible oil and gas drilling rigs. The collaboration between the
companies began in 2006 within an alliance then mainly covering FPSO
vessels.
The importance of Asia as a shipbuilding hub has increased during
recent years. In order to be closer to the fastest growing
shipbuilding markets, the senior management of Wärtsilä Ship Power
will relocate to Shanghai, China during 2008.
MANUFACTURING
During the second quarter investments to enhance the production
capabilities and flexibility of the large engines continued in Italy
and Spain. Investment decisions have been made to increase capacity
for propulsion products in Norway and the Netherlands. All these
investments will be operational during 2009. In Asia further
investments are being made to increase production capacity in the
Wärtsilä-CME Zhenjiang Propeller Co. Ltd joint venture. This capacity
will be operational in the second half of 2009. In Vaasa, Finland, an
important environmental step was taken by launching an investment
program in test bed facilities to reach a step change in improved
energy efficiency. Wärtsilä is further promoting similar initiatives
globally. All other ongoing investment programmes to increase
capacity, including joint ventures, are proceeding according to plan.
Continuous progress has been made in enlarging the supplier base in
emerging markets.

RESEARCH & DEVELOPMENT
During the second quarter the new RTX-4 full-scale, low-speed
research engine was inaugurated in the Diesel Technology Centre in
Winterthur, Switzerland. This large research engine is employed to
further develop Wärtsilä low-speed marine engines to meet market
needs.

In May Wärtsilä and Mitsubishi Heavy Industries Ltd. signed a joint
development agreement to design and develop new small, low-speed
marine diesel engines of less than 450 mm cylinder bore. This
agreement is an extension of the strategic alliance created by
Wärtsilä and Mitsubishi in September 2005.

PERSONNEL
Wärtsilä had 17,552 (15,180) employees at the end of June, growth of
16%. The largest personnel increases took place in the Services
business where 10,394 (8,937) people were employed at the end of
June.

During the review period Wärtsilä launched a Top Graduates
professional programme for R&D. During the programme, attendees will
drive R&D projects throughout Wärtsilä's international organization.
A similar programme for finance graduates has been in action since
March 2007.

CHANGES IN MANAGEMENT
Atte Palomäki (42) M.Sc. (pol.) started as Group Vice President,
Corporate Communications and member of the Board of Management on
March 1, 2008.

SHARES AND SHAREHOLDERS
In March Wärtsilä's A and B-series shares were combined. Following
the combination all shares now carry one vote and equal rights. The
combination of the share series involved a free share issue directed
to the holders of Series A-shares so that holders of Series A-shares
received one share free of charge for each nine Series A-shares. In
the directed share issue 2,619,954 shares were given. Trading with
the new and combined shares started on March 27.

SHARES ON HELSINKI EXCHANGES


30 June 2008                    Number of  Number of Number of shares
                                                               traded
                                   shares      votes         1-6/2008
WRT1V                          98 620 565 98 620 565       76 035 377

1 Jan. -30 June 2008                 High        Low Average 1) Close
WRT1V                               52.40      35.02      43.75 39.95
1) Trade-weighted average price

                                  30 June    30 June
                                     2008       2007
Market capitalization, EUR          3 940      4 659
million

                                  30 June    30 June
                                     2008       2007
Foreign shareholders                50.0%      32.6%



CHANGES IN OWNERSHIP
During the review period and in relation to the combination of the
share series and the directed free share issue, Wärtsilä was informed
of the following changes in ownership:

The Fiskars Group's share of Wärtsilä Corporation's votes decreased
to less than 1/5 (20%). Following the transaction Fiskars Corporation
holds 901,857 or 0.9% of Wärtsilä's share capital and votes, and the
Fiskars wholly owned subsidiary Avlis AB's holds 15,944,444 or 16.2%
of Wärtsilä's share capital and total votes. In total, Fiskars Group
holds 16,846,301 or 17.1% of Wärtsilä Corporation's share capital and
votes.

Varma Mutual Pension Insurance's share of Wärtsilä Corporation's
shares increased to more than 1/20 (5%) and the share of the votes
decreased to less than 1/10 (10%). Following the transaction Varma
holds 5,130,087 or 5.2% of Wärtsilä's share capital and total votes.

Svenska Litteratursällskapet i Finland r.f's share of Wärtsilä
Corporation's votes decreased to less than 1/20 (5%). Following the
transaction Svenska Litteratursällskapet holds 1,735,506 or 1.76% of
Wärtsilä's share capital and total votes.

The above-mentioned changes came into effect when the combined and
new shares were registered in the trade register on 26 March 2008.

OPTION SCHEMES
During the review period Wärtsilä had one option scheme that ended on
31 March 2008. All option rights of this 2002 option scheme were
exercised.

DECISIONS TAKEN BY THE ANNUAL GENERAL MEETING
Wärtsilä's Annual General Meeting on 19 March 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
2007. The Meeting approved the Board of Directors' proposal to pay a
dividend of EUR 2.25 per share and an extra dividend of EUR 2.00 per
share for a total dividend of EUR 4.25 per share.

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 authorized public accountants KPMG Oy Ab was appointed to
be the company's auditors.

The Annual General Meeting approved the proposal of the Board of
Directors to amend the Articles of Association.

The Annual General Meeting approved the proposal of the Board of
Directors to direct a free share issue to holders of A shares and to
combine the Series A and Series B shares and the changes to the
Articles of Association.

ORGANIZATION 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:
Chairman Antti Lagerroos, Maarit Aarni-Sirviö, Matti Vuoria

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

Compensation Committee:
Chairman Antti Lagerroos, Matti Vuoria, Bertel Langenskiöld

RISKS AND BUSINESS UNCERTAINTIES
During the review period the uncertainty in the global market for raw
materials increased. Raw material prices have increased which will
impact production costs globally in the future. Wärtsilä's Corporate
Supply Management organization monitors cost development closely,
while long term cost development is managed via our supplier
agreements. Other risks remain mainly related to the capacity
constraints of the suppliers as a result of high global demand in key
components. Wärtsilä's measures to secure the availability of key
components continue in close collaboration with the supply chain. In
Services, the biggest risks continue to be the attraction and
retention of new personnel in a very active business environment.
Wärtsilä's measures to ensure the availability of these profiles are
ongoing.

MARKET OUTLOOK
During the second quarter of 2008 no major shifts in the fundamentals
of the shipping sector have occurred. Freight rates have remained
very strong and ship prices were still very high. The unrest in the
financial markets has put investment plans on hold especially in
emerging shipbuilding countries, but business for established
shipbuilders is still strong.

In 2008 the activity level of new vessel ordering will be at
significantly lower levels than during the past very highly active
years. From a historical perspective, markets remain active and the
ordering activity in June evidenced, at least momentarily, a renewal
of stronger ordering. Investments in new projects are still being
made and short term indicators remain favourable for Wärtsilä. During
the third quarter, Wärtsilä Ship Power expects its ordering activity
to continue at the same good level as during the second quarter. In
the fourth quarter some slowdown is foreseen. Due to the current
market conditions market visibility has become shorter.

In the Power Plant market the situation remains good. The main
drivers for continued growth in the power plant market remain the
quest for increased efficiency and versatility in power generation
due to environmental concerns and fuel availability issues. Flexible
baseload, as well as industrial self-generation applications, are
forecasted to remain active market segments especially throughout the
Middle East, Africa and the Americas. Continued growth potential is
seen in the grid stability services market in North America as well
as in other developed countries. Wärtsilä's power plant solutions are
ideally suited for today's markets, which require high efficiency and
operational flexibility as well as environmental sustainability. For
Wärtsilä Power Plants continued high ordering activity is expected in
all segments for the remainder of the year.

Growth in Services continues to be solid and will continue to
constitute a considerable share of Wärtsilä's net sales.

The long order book and flexible manufacturing model, in combination
with the solid growth and global presence in Services, gives Wärtsilä
ample time to react to potential fluctuations in the market.

WÄRTSILÄ'S PROSPECTS FOR 2008 REITERATED
Based on the strong order book, Wärtsilä's net sales are expected to
grow by about 25% in 2008. Wärtsilä's profitability varies
considerably from one quarter to another. The full-year operating
margin will exceed 11%.

WÄRTSILÄ INTERIM REPORT JANUARY - JUNE 2008
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
2007. 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.
Amended and new International Financial Reporting Standards (IFRS)
and Interpretations as of 1 January 2008:

-        IFRIC 11 IFRS 2 - Group Treasury Share Transaction
-        IFRIC 12 Service Concession Agreements
-        IFRIC 13 Customer Loyalty Programmes
-        IFRIC 14 IAS 19 - The Limit on Defined Benefit Asset,
Minimum Funding Requirements and their Interaction

The adoption of the new and revised standards and interpretations
does not have any material effect on the interim financial report.


This interim report is unaudited.



CONDENSED INCOME STATEMENT
MEUR                                    1-6/2008     1-6/2007    2007
Net sales                                  1 942        1 558   3 763
Other income                                  10            8      21
Expenses                                  -1 706       -1 393  -3 328
Depreciation and impairment                  -42          -37     -78
Operating result                             204          136     379
Financial income and expenses                  1           -5      -8
Share of profit of associates                  2                    1
Profit before taxes                          206          132     372
Income taxes                                 -61          -37    -106
Profit for the financial period              145           95     265

Attributable to:
Equity holders of the parent
company                                      142           94     262
Minority interest                              4            1       3
Total                                        145           95     265

Earnings per share attributable to equity holders of the
parent company:
Earnings per share, EUR                     1,45         0,98    2,74
Diluted earnings per share, EUR             1,45         0,98    2,73


CONDENSED BALANCE SHEET
MEUR                                30 June 2008 30 June 2007 31 Dec.
                                                                 2007
Non-current assets
Intangible assets                            648          634     646
Property, plant and equipment                405          333     377
Equity in associates                          17           11      16
Investments available for sale               121          184     155
Deferred tax receivables                      69           76      70
Other receivables                             17           43      19
                                           1 277        1 281   1 283
Current assets
Equity in associates                                        1       1
Inventories                                1 511        1 087   1 081
Other receivables                          1 114          929   1 088
Cash and cash equivalents                    156          133     296
                                           2 781        2 149   2 466

Assets                                     4 058        3 430   3 749


Shareholders' equity
Share capital                                336          335     336
Other shareholders' equity                   698          817     979
Total equity attributable to equity
holders of the parent                      1 034        1 152   1 315

Minority interest                             11            8      10
Total shareholders' equity                 1 044        1 160   1 325

Non-current liabilities
Interest-bearing debt                        335          259     245
Deferred tax liabilities                      76           77      81
Other liabilities*                           841           75     466
                                           1 251          411     792
Current liabilities
Interest-bearing debt                         87           89      38
Other liabilities                          1 675        1 771   1 594
                                           1 762        1 860   1 632

Total liabilities                          3 013        2 270   2 424

Shareholders' equity and
liabilities                                4 058        3 430   3 749

*In Q2/2007, the total amount of Advances received was presented in
Current liabilities.

CONDENSED CASH FLOW STATEMENT
MEUR                                    1-6/2008     1-6/2007    2007
Cash flow from operating
activities:
Profit before taxes                          206          132     372
Depreciation and impairment                   42           37      78
Financial income and expenses                 -1            5       8
Selling profit and loss of fixed
assets and other adjustments                  -5           -3      -7
Share of profit of associates                 -2                   -1
Changes in working capital                     6           51     135
Cash flow from operating activities
before financial items and taxes             247          221     585
Net financial items and income
taxes                                        -40          -92    -154
Cash flow from operating activities          207          129     431

Cash flow from investing
activities:
Investments in shares and
acquisitions                                 -14          -43     -65
Net investments in tangible and
intangible assets                            -68          -66    -166
Proceeds from sale of shares                   1                    7
Cash flow from other investing
activities                                     6           10       9
Cash flow from investing activities          -75          -99    -214

Cash flow from financing
activities:
Issuance of share capital                                   3       4
New long-term loans                          100           61      65
Amortization and other changes in
long-term loans                              -10          -18     -33
Changes in short term loans and
other financing activities                    54           46      36
Dividends paid                              -410         -168    -168
Cash flow from financing activities         -266          -76     -95

Change in liquid funds, increase
(+) / decrease (-)                          -135          -46     122


Cash and cash equivalents at
beginning of period                          296          179     179
Fair value adjustments, investments            1            1       1
Exchange rate changes                         -6           -1      -6
Cash and cash equivalents at end of
period                                       156          133     296



STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
MEUR               Total equity attributable to equity holders   Minority  Total
                   of the parent
                                                                 interest equity
                                                   Fair
                             Share                value
                     Share   issue Translation      and Retained
                                                  other
                   capital premium differences reserves earnings
Shareholders'
equity on 31
December 2007          336      61           3      127      788       10  1 325
Translation
differences                                 -5                                -6
Available-for-sale
investments
   gain/loss from
fair valuation,
   net of taxes                                     -27                      -27
Cash flow hedges
after taxes                                          18                       18
Net income
recognized
directly in equity                          -5      -10                -1    -16
Profit for the
financial period                                             142        4    145
Total recognized
income an expense
for the period                              -5      -10      142        3    129
Dividends paid                                              -408       -2   -410
Shareholders'
equity on 30 June
2008                   336      61          -2      117      522       11  1 044

Shareholders'
equity on 31
December 2006          334      58           3      128      693       13  1 230
Translation
differences                                  3                                 4
Other changes                                                          -5     -5
Available-for-sale
investments
   gain/loss from
fair valuation,
   net of taxes                                       1                        1
Cash flow hedges
after taxes                                           1                        1
Net income
recognized
directly in equity                           3        2                -5      0
Profit for the
financial period                                              94        1     95
Total recognized income and
expense for the period                       3        2       94       -4     95
Options exercised        1       2                                             3
Dividends paid                                              -167       -1   -168
Shareholders'
equity on 30 June
2007                   335      60           6      130      620        8  1 160



Geographical segments Europe Asia Americas Other Group
MEUR
Net sales 1-6/2008       699  773      315   155 1 942
Net sales 1-6/2007       677  558      188   134 1 558



INTANGIBLE ASSETS AND PROPERTY, PLANT & EQUIPMENT
MEUR                                          1-6/2008  1-6/2007 2007
Intangible assets
Book value at 1 January                            646       602  602
Changes in exchange rates                           -5        -1   -6
Acquisitions                                         8        34   47
Additions                                           14        15   33
Depreciation and impairment                        -16       -14  -30
Disposals and intra-balance sheet transfer                    -3
Book value at end of period                        648       634  646

Property, plant and equipment
Book value at 1 January                            377       315  315
Changes in exchange rates                           -1              3
Acquisitions                                         3         1
Additions                                           58        54  133
Companies sold                                               -17  -17
Depreciation and impairment                        -26       -23  -48
Disposals and intra-balance sheet transfer          -6         3   -9
Book value at end of period                        405       333  377


GROSS CAPITAL EXPENDITURE
MEUR                                          1-6/2008  1-6/2007 2007
Investments in securities and acquisitions          14        43   65
Intangible assets and property, plant and
equipment                                           73        69  166
Group                                               87       112  231



During the review period investment in the enlargement of propulsion
equipment manufacturing in the Netherlands and China amounted to EUR
3 million, and Wärtsilä had commitments related to the enlargements
amounting to EUR 10 million at the end of the review period. In
addition, Wärtsilä's part of the investments related to the
investment programme in the Korean joint venture Wärtsilä Hyundai
Engine Company Ltd. amounted to EUR 10 million and the part of the
commitments related to the investment programme were EUR 2 million
at the end of the review period.



IMPACT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE
SHEET
During the review period Wärtsilä has acquired a Norwegian company
Maritime Service AS, specializing in ship service, mechanical and
reconditioning services, a Danish company International Combustion
Engineering A/S, specializing in project engineering and the service
and repair of steam boilers and ancillary burner systems,  the boiler
services business of International Combustion Engineering's (I.C.E.)
former subsidiary in Dubai and a German company Claus D. Christophel
Mess- und Regeltechnik GmbH (CDC) specializing in the design,
delivery and service of automation systems for ship owners and yards.



MEUR                               1-6/2008
Acquisition costs                        11
Acquired assets to fair value            -6
Goodwill                                  5

Specification of acquired assets:
Intangible assets                         4
Property, plant and equipment             3
Inventories                               1
Receivables                               3
Cash and cash equivalents                 1
Liabilities                              -4
Deferred tax liabilities                 -1
Total                                     6



INTEREST-BEARING LOAN CAPITAL
MEUR                           30 June 2008 30 June 2007 31 Dec. 2007
Long-term liabilities                   335          259          245
Current liabilities                      87           89           38
Loan receivables                        -12          -36          -14
Cash and bank balances                 -156         -133         -296
Net                                     254          178          -27


FINANCIAL RATIOS                   1-6/2008     1-6/2007         2007
Earnings per share, EUR                1.45         0.98         2.74
Diluted earnings per share,
EUR                                    1.45         0.98         2.73
Equity per share, EUR                 10.48        12.03        13.70
Solvency ratio, %                      36.7         44.3         45.9
Gearing                                0.25         0.18        -0.01


PERSONNEL
                                   1-6/2008     1-6/2007         2007
On average                           17 084       14 791       15 337
At end of period                     17 552       15 180       16 336


CONTINGENT LIABILITIES
MEUR                           30 June 2008 30 June 2007 31 Dec. 2007
Mortgages                                13           15           13
Chattel mortgages                         7           22            8
Total                                    21           38           22

Guarantees and contingent
liabilities
on behalf of Group companies            463          391          479
Nominal amount of rents
according
to leasing contracts                     71           51           69
Total                                   534          442          548


NOMINAL VALUES OF DERIVATIVE INSTRUMENTS
MEUR                           Total amount of which closed
Interest rate swaps                     110
Foreign exchange forward
contracts                             1 426          378
Currency options, purchased             152           20
Currency options, written                20           20



CONDENSED INCOME
STATEMENT, QUARTERLY
MEUR          4-6/2008 1-3/2008 10-12/2007 7-9/2007 4-6/2007 1-3/2007
Net sales        1 092      850      1 272      933      797      761
Other income         5        5         10        3        4        4
Expenses          -953     -754     -1 114     -821     -710     -683
Depreciation
and
impairment         -22      -21        -22      -19      -18      -18
Operating
result             122       81        146       96       73       63
Financial
income and
expenses             7       -7         -1       -2       -1       -4
Share of
profit of
associates           2                   1
Profit before
taxes              132       74        145       95       72       60
Income taxes       -36      -25        -43      -26      -20      -17
Profit for
the financial
period              96       49        103       68       52       42

Attributable
to:
Equity
holders of
the parent
company             94       47        101       68       52       42
Minority
interest             2        2          2        1        1
Total               96       49        103       68       52       42

Earnings per share attributable to equity
holders of the parent company:
Earnings per
share, EUR        0.96     0.49       1.05     0.71     0.54     0.44
Diluted
earnings per
share, EUR        0.96     0.49       1.05     0.70     0.54     0.44




CALCULATION OF FINANCIAL RATIOS

Earnings per share (EPS)
Profit before taxes - income taxes - minority interests
Adjusted number of shares over the financial year

Equity per share
Shareholders' equity
Adjusted number of shares at the end of the period

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

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



23 July 2008

Wärtsilä Corporation
Board of Directors