Update 2 October 2026: The financial impact of the write-down to Wärtsilä’s full-year 2026 is expected to be significantly less than initially communicated. Wärtsilä leadership offered a brief commentary on the JV transaction in the group’s pre-silent period conference call yesterday afternoon. Whereas previous guidance had estimated a financial hit of around €40 million (US$45 million) to €50 million, the expectation now is around €10 million to €20 million, executives said. Additionally, according to executive VP and CFO Arjen Berends, the JV will move out of the operating result and into investing activities when the new accounting standard IFRS 18 comes into force next year.
“In addition, also IFRS 18 has an impact to hedging cost that will actually move from financial items to operating result in the future,” Berends said.
Wärtsilä’s energy storage business will now operate under the new brand name Valo, following the close of the company’s joint venture (JV) with RCT Solutions.
Finnish marine and engine power solutions company Wärtsilä announced this morning that the JV transaction with German solar PV manufacturer RCT Solutions has closed, with Valo officially launching today.
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Nasdaq Helsinki-listed Wärtsilä is due to host a pre-silent conference call this afternoon at 3pm EEST to discuss the JV.
The pair’s JV agreement was announced in June. Valo will be run as a 50:50 JV. Financial terms were not disclosed, but Wärtsilä reiterated a previous claim that the transaction represents less than 5% of its total assets.
The launch follows Wärtsilä’s review of the energy storage business it created in 2017 with the acquisition of US software-specialised energy storage system integrator Greensmith. The 18-month strategic review was opened in October 2023, concluding last May.
Since then, Wärtsilä has reported the Energy Storage business division’s financial results separately from its other segments. According to the company, energy storage sales were worth €694 million (US$783 million) in 2025, about a tenth of its total sales of €6.9 billion, while its energy storage business turned a 3.3% profit versus 12.1% for its other businesses last year.
Wärtsilä was ‘severely hit with tariffs’ according to analyst
RCT Solutions CEO Peter Fath now leads Valo as its CEO. Wärtsilä CEO Håkan Agnevall previously said the division is expected to be loss-making in the short term, causing a €40 million to €50 million hit to 2026 full-year operating results, but the company expects it to generate positive results toward the end of next year, according to previous announcements.
An equity analyst covering Wärtsilä told ESN Premium in June that the company likely needed to remove energy storage from its profit and loss reporting, as it was dilutive to group margins.
Timo Heinonen at Handelsbanken said Wärtsilä had failed in attempts to divest the business “conventionally,” noting that Wärtsilä’s US-dominated business had floundered through 2025’s policy uncertainty, meaning it had to find new markets for its battery energy storage system (BESS) products and system integration services.
“It’s primarily a software business, so they have to invest in R&D all the time to stay with the competition. But it’s hard to make the business profitable, so it’s diluting the group profitability,” Heinonen said, adding that Wärtsilä had not been able to capitalise on synergies between its gas engine and BESS businesses.
Another analyst, Louis Billon at Alpha Value, agreed that the synergies with Wärtsilä’s other core businesses “were not very significant,” and noted the company had been “severely hit with tariffs” as an integrator largely dependent on lithium battery cell supply from Chinese manufacturers.
Wärtsilä’s bankability was downgraded from BBB to a BB rating in the most recent edition of the quarterly Battery StorageTech Bankability Ratings Report, produced by our colleagues at PV Tech Research. The downgrading was attributed to “continuously low energy storage orders” as well as the decision to form the JV, as explained in a blog discussing the report’s Q2 edition last month.
This article, including the headline, has been amended from its original form to correct the spelling of Valo and also to highlight that the Wärtsilä JV has been formed with RCT Solutions and not RCT Solar, a separate company in the RCT Group, as was originally reported.
