One of the world’s leading engine maker, Wartsila, has identified that some members of its staff in Italy had manipulated the results of fuel consumption tests, where those engines have been delivered to ships. A ‘couple of hundreds’ of engines had been affected by manipulated tests over several years at the Wartsila Delivery Centre Trieste in northeast Italy.
“This is a hit to our brand and reputation,” Chief Executive Jaakko Eskola said as he apologised for the actions.
The Finnish engine maker, Wartsila, faced a drastic fall of 2.9% in early trading to 37.49 Euros ($41.07) before recovering to 38.25 euros by 1250 GMT. This fall happened just after the company announced that members of its staff in Italy had manipulated the results of some fuel consumption tests.
This deviation was detected in an internal audit at the Wartsila’s delivery centre in Trieste and constituted on average 1% of fuel consumption. The company began discussions with affected clients on Monday. Wartsila increased its scrutiny practices in the transport sector after the carmaker Volkswagen admitted to manipulating emission tests for diesel vehicles last year.
“Fuel efficiency is the key in this market, every percentage point goes straight out of the profits of the client,” says Juha Kinnunen an analyst at Inderes Equity Research. Some customers feel oppressed as around 70% of shipping costs are related to fuel.
Wartsila has started their investigation. But, the company has not issued any information about the disciplinary actions taken.
From Wartsila Press Release:
An analyst and press teleconference was held on Monday 7 March 2016, at 10.00 a.m. Finnish time regarding the stock exchange release published earlier the same day. The recording of the teleconference is now available.
Source: Reuters
