Fincantieri Announces H1 2020 Financial Report

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(Image Courtesy: Fincantieri)

No Cancellation and Total record Working Load of almost 38 Bn

COVID-19 update

  • No cancellation of orders
  • Shift of the production program with consequent drop in revenues, following the stoppage of activities
  • The delivery of three cruise ships during the second part of the year 2020 from Italian shipyards is expected
  • Gradual restart productive activities as of April 20, 2020 with the simultaneous implementation of all measures necessary to protect the health and safety of its employees and those industries
  • As of June 30, the presence of production staff on construction sites has reached about 90% of the workforce when fully operational

Consolidated results for the first half of 2020

  • Revenues at 30 June 2020 amounted to EUR 2.369 billion (EUR 2.808 billion at June 30, 2019) , a decrease of 15.6%, affected by the loss of value of production in half for about EUR 790 million
  • EBITDA amounted to euro 119 million (euro 227 million at June 30, 2019) with EBITDA margin of 5.0% (8.1% at 30 June 2019). EBITDA was affected by the non-contribution of around € 65 million due to the production stoppage
  • Profit for the period adjusted negative amounting to EUR 29 million (EUR 47 million at June 30, 2019)
  • Result of the negative period to EUR 137 million (EUR 12 million at June 30, 2019), net of expenses related to the spread of COVID-19 for EUR 114 million and litigation for damages from asbestos for € 23 million
  • Net financial debt [1] amounted to EUR 980 million (EUR 736 million at 31 December 2019): it reflects the typical changes in working capital related to the construction of cruise ships accentuated by COVID-19 effects with the postponement of delivery of a unit cruise scheduled in the first half and part of the commercial collections expected in the period
  • Overall workload [2] for 117 vessels amounting to EUR 37.9 billion (EUR 32.7 billion at 31 December 2019), about 6.5 times revenue in 2019: backlog of EUR 28 billion with 92 units over up to 2027 and soft backlog of € 9.9 billion
  • Delivered 10 ships from 7 different plants , including 3 cruise ships, 1 fishery unit and 1 military ship
  • Continuation of the diversification strategy with the development, through the various divisions and companies of the Group, the business of the electronics and cyber security infrastructure, accomodation complete for the cruise ship industry, and of systems, components and services post- sales (which recorded a 5.7% increase in revenues only in the last half year) and in the commercial sector through the awarding of orders for the offshore renewable energy sector (one SOV unit for the maintenance of marine wind farms), for the fishery sector (two innovative units) and for the infrastructure sector (reconstruction of the Port of Rapallo) and subscription of a partnership agreement for the design and reconstruction of the “Renato Dall’Ara” stadium (Bologna)

Other relevant events

  • Fincantieri Marinette Marine prime contractor  in the “FFG (X)” program: contract of almost  USD 800 million won  for the design and construction of the class leader of the new missile frigates for the US Navy. If exercised, options for an additional 9 units will bring the contract value to USD 5.5 billion
  • Completed in record time the backbone of the new bridge of Genoa completed by end of April 2020 the launch altitude of 19 spans
  • JV Naviris : signed the first contract ‘ Research and Technology’ with OCCAR for five research projects
  • Commitment to sustainability renewed with the renovation of the Sustainability Plan 2018 – 2022 and recognized the dedication of the Group in its scope:
  • Agreement with Eni extended for initiatives in the area of ​​decarbonisation and circular economy
  • Obtained B rating from CDP for its commitment to fight climate change. Positioning in the highest range of the Vigeo Eiris ranking, in first place among its reference peers

The Board of Directors Fincantieri SpA (Fincantieri), chaired by Giampiero Massolo, hasexamined andapproved the half-year financial report at 30 June 2020 , prepared in accordance with principles international accounting (IFRS).

The Board of Directors also approved the appointment of Dr Fabio Gallia as General Manager of the Company, formulating him a wish for good work. The Board expressed its belief that Doctor Gallia will be able to contribute with his commitment and professionalism to the achievement of increasingly challenging and ambitious goals for the Group.

The Board then sent a warm thank you to engineer Alberto Maestrini for the professionalism, commitment and self-sacrifice with which he has held the position of General Manager since 2016, also expressing his best wishes for the prestigious professional challenges to come that he will face within the Group.

On the sidelines of the Board meeting, Giuseppe Bono , CEO of Fincantieri , commented:

“We have faced this period in many ways dramatic with the utmost determination so that the company, once spent, would have the possibility of being stronger than before This approach has proven successful and has allowed us not only to avoid the cancellation of orders, but also to win important tenders, and so the workload has reached a new record.

Today, in addition to having the world leadership in the construction of cruise ships, we can also boast that for surface military ships. We faced the emergency of Coronavirus thinking that we had to preserve our resources and those of the related industries, fundamental assets of Fincantieri and the country. We succeeded in adopting a series of measures that achieved 91% of the satisfaction of our employees, as evidenced by the results of a survey carried out throughout the company. It is important to underline that today around 30,000 people are present in our factories.

Obviously the economic and financial results are influenced by the production slowdown due to the Coronavirus. However, the workload allows us to look to the future with confidence, confirming a continuity of work for the next 6/7 years with consequent financial and economic performance in line with the targets of the previous Business Plan.

With regard to the other decisions resolved by the Board of Directors, I would like to offer special thanks to Eng. Alberto Maestrini for the great dedication and professionalism with which he has held the position of General Manager over the past four years and the absolute loyalty to the company where he will continue to hold important and delicate positions. My personal welcome goes to Dr Fabio Gallia, appointed by the Board as new General Manager, along with that of the whole company. His prestigious positions as Chief Executive Officer in leading Italian companies and the participation on the Boards of numerous industrial companies express the figure of his caliber.”

Sea News, July 31

Baibhav Mishra
Author: Baibhav Mishra

Associate Editor, Sea News