Fincantieri Secures Enough Work for Six Years

Italian shipbuilding major Fincantieri reported a total backlog of over EUR 25 billion (USD 29 billion) in its report for the third quarter of this year, which is enough to keep the shipbuilder busy for six years.

Order backlog as at September 30, 2017 was EUR 20.3 billion, up from EUR 19.0 billion for the same period last year, with 97 ships in the order book.

The third quarter of 2017 saw an accelerated revenue growth, with an increase of about 19% compared to the same period in 2016, which, according to Fincantieri, is in line with the full-year expectations.

The revenue for Q3, 2017 stood at EUR 3.5 billion against EUR 3.2 billion reported a year earlier.

EBITDA was also up equaling to EUR 233 million, over EUR 185 million reported in the same period in 2016, with EBITDA margin reaching 6.5%, up 14% from the 5.7% margin of the first nine months of 2016.

The year-on-year growth is mainly attributable to the increase in the volumes of the cruise ships business amid orders for larger vessels, with cruise ship revenues now accounting for approximately 51% of the group’s revenues before consolidation adjustments.

“The excellent commercial, managerial and economic results of the first nine months of 2017 further consolidate Fincantieri’s leadership and allow us to confirm, to date, the expected results for 2017, in line with the Business Plan,” Giuseppe Bono, Fincantieri’s Chief Executive Officer, said.

The company’s offshore business reported a decline in revenue of 8pct reaching EUR 666 million, against EUR 723 million in 2016,  due to the reduction in production volumes at VARD’s European and Brazilian shipyards

During the quarter, Fincantieri saw Princess Cruise firm an order for a cruise ship, finalizing of an order with Silversea for one cruise ship, signing of a MoA with Carnival for one cruise ship for the luxury brand Cunard, bringing the total order tally to 14 cruise ships (including options) acquired in 2017.

In addition, Fincantieri signed a contract for the lengthening of Silver Spirit for Silversea Cruises.

Four additional units were delivered in the quarter, for a total of nine ships delivered in 2017, of which four cruise ships, three naval vessels and two ATB units (Articulated Tug and Barge) for the transport of goods in the chemical/petroleum sector, at the Sturgeon Bay yard.

In the fourth quarter of 2017, the company expects the delivery of the first prototype for MSC (the largest ship ever built in Italy), the full-swing production for the Italian Navy’s fleet renewal program and the full swing of design activities for the Qatari Ministry of Defense contract.

The Oil&Gas industry remains in deep crisis, although there is some visibility on the first signs of a recovery in E&P investments. As such, VARD is continuing with the implementation of the business diversification actions already started, as well as focusing on the products with greatest potential in its reference markets, the shipbuilder said.