Cruise Shipbuilding Boosts Fincantieri’s Revenues
Italian shipbuilding group Fincantieri closed 2019 with record revenues driven by a significant increase in cruise ship production volumes.
Revenues amounted to a record EUR 5.8 billion (USD 6.3 billion) in 2019, an increase of 8 percent compared to EUR 5.4 billion reported in 2018.
As explained, the group saw remarkable growth in the cruise shipbuilding business of 8.8 percent and in equipment, systems and services business of 38.1 percent. This growth counterbalanced the reduction of volumes of the offshore and specialized vessels business of 29.4 percent.
The cruise ships business area recorded an increase in revenues of 10.8 percent, and accounted for 56 percent of the group’s revenues, while the naval vessels business area recorded an increase in revenues of 4.8 percent, accounting for 23 percent of the group’s revenues.
However, the negative performance of the subsidiary Vard, for which a restructuring plan was implemented following the delisting in late 2018, has had an impact on group results.
EBITDA stood at EUR 320 million in 2019, against EUR 421 million posted a year earlier. In addition, adjusted net loss amounted to EUR 71 million in 2019, compared to an adjusted profit of EUR 114 million in 2018, and loss for the period was EUR 148 million in 2019, compared to a profit of EUR 69 million seen in 2018.
New orders in 2019 amounted to EUR 8.7 billion and were in line with 2018 order intake, with 28 new units and with a book-to-bill ratio of 1.5.
On overall orders, before intersegment consolidation adjustments, the shipbuilding segment accounted for 93 percent, the offshore and specialized vessels segment for 2 percent and the equipment, systems and services segment for 10 percent.
In the cruise ships business area of the shipbuilding segment, Fincantieri recorded remarkable business success acquiring orders from historical clients for 13 new units for six different brands, with an overall value of EUR 6 billion.
The group’s total backlog on December 31, 2019, included 109 units and amounted to EUR 32.7 billion.
After the end of 2019 year, in the first months of 2020, the global outburst of the COVID-19 pandemic caused an extreme pressure on national health systems and the need for the Italian government to issue measures to contain the further outbreak of the virus.
Apart from other initiatives aimed at protecting the health of its employees, Fincantieri halted production activities at all its Italian yards as of March 16. The group said the coronavirus is significantly affecting the course of its 2020 business operations.
Despite this, Fincantieri believes that “its equity and economic structure will successfully cope with the repercussions of the emergency, should the crisis cease its effects within a reasonable time.”
Currently, Fincantieri is focused on the safeguard of clients and strategic partners to ensure the acquired backlog, notably in the cruise sector, among the hardest hit by COVID-19 crisis.
The group also informed it would finalize its five-year business plan once it is able to analyze the potential impact of the pandemic.
“In consideration of the uncertainty regarding the impacts on public health, and on the country’s production and social and economic aspects, the group will disclose to the market a new 2020-2024 Business Plan as soon as the emergency permits a clear evaluation of its possible impacts,” Fincantieri noted.
Fincantieri has around 20 shipyards in 4 continents and employs over 19,000 people.