UPDATE 1-Finland's Wartsila says coronavirus will hit sales, profits

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March 31 (Reuters) - Finnish engineering firm Wartsila said on Tuesday demand for its services had started to weaken as its customers’ operations are affected by the coronavirus outbreak.

“This will materially impact Wartsila’s net sales and earnings for 2020 starting in March,” it said in a statement.

Wartsila, which makes power plants and ship technology, said order intake and invoicing had developed largely in line with its expectations in January and February.

“As the virus and efforts to contain it have spread around the world, we are facing temporary disruptions to our operations and a weakening demand environment,” Chief Executive Jaakko Eskola said in the statement.

Wartsila said tightening restrictions were disrupting its delivery schedules, access to customer sites, and its ability to perform service activities.

“Supply chains and logistics are also seeing disruptions,” it said.

Wartsila said it will create cost savings of around 100 million euros through measures such as temporary layoffs, reducing working hours and cutting any discretionary spending.

Shares in Wartsila were 2.3% higher in afternoon trading. (Reporting by Tarmo Virki in Tallinn; editing by Louise Heavens and Barbara Lewis)