In the first quarter 2021, Cruise shipbuilder Fincantieri reported revenues and income, of €1,426 mill, excluding pass-through activities of €222 mill, an increase of 9.1%, compared to the same quarter of 2020.
1Q21 production volumes exceeded those reported in the first quarter last year, fully recovering the shortfall caused by the suspension of production activities at the Group’s Italian shipyards and production sites, owing to the COVID-19 outbreak.
The results were in line with expectations, marking a step forward towards 2021 targets, with revenues expected to increase considerably in the remaining part of the year, as a consequence of the ramp up needed for the development of the large workload and to meet the delivery schedule, the company said.
The higher revenues and volumes achieved were driven by the full resumption of production activities in all the Group’s shipyards and production sites. The increase, compared to 1Q20, was a combination of a positive trend in Shipbuilding (+12.8%, excluding pass-through activities) and Equipment, Systems and Services (+13.4%) segments offset by a decrease in revenues recorded in the Offshore and Specialised vessels segment (-23.5%).
Group EBITDA, at €101 mill (€72 mill 1Q20), recovered well beyond the margin lost in the first quarter of l\st year, due to the lack of progress on naval projects during the suspension of activities.
Revenues in the Shipbuilding segment for 1Q21, excluding pass-through activities, amounted to €1,278 mill, up by 12.8% compared to the same period of 2020. The cruise ship business area saw an increase of 11.6%, while the naval vessel business area registered 16.2% growth, excluding pass-through activities. They accounted for 58% and 22% of the Group’s revenues, respectively.
This year’s production schedule for the Italian shipyards envisages the delivery of five cruise ships, of which one, ‘Viking Venus’, was delivered on 15th April, three units to be delivered in 3Q21 and one unit in 4Q21.
Subsidiary Vard Cruise’s lower production volumes for the quarter, compared to 1Q20, affected the revenue trend of the business unit, with two luxury-niche units to be delivered in 2021, instead of three delivered in 2020.
In view of the completion of the ongoing vaccination campaign, by virtue of the health and safety protocols put in place in all Group’s shipyards and production sites and in the absence of negative developments, due to the pandemic with unforeseeable repercussions, Fincantieri expects to keep production in full swing, as in the second half of 2020, allowing the Group to go back to pre-pandemic growth levels.
With regard to the cruise market, while in the US the Centres for Disease Control and Prevention indicated mid-July as a potential starting point for the resumption of activities, some shipowners, whose routes are not affected by US directives, have already resumed or are about to resume operations.
Despite the crisis triggered by the COVID-19 outbreak, the Group is returning to its growth path, thanks to a sizeable and diversified backlog, that it has been able to fully preserve (in particular in the cruise business) and thanks to the strategy to support shipowners.
The net financial position is expected to increase during the first half of 2021, consistently with the cruise shipbuilding business specific financial dynamics and with the reassessed delivery schedule, which includes seven cruise ships, of which four are scheduled for the second half of the year.
Consistent with the deliveries timeline, the net financial position will tend to settle, at the end of 2021, to a value in line with the 2020, including the full CapEx plan scheduled for the year.
During Fincantieri’s recent Board meeting, CEO Giuseppe Bono, said: “The results of the first quarter picture an healthy Group able, as expected, to confirm the guidance, with growing revenues and increased margins. Alongside such an encouraging performance, together with an overall slight economic recovery and also by virtue of the progress made in dealing with the pandemic, we welcome both the cautious resumption of cruise activities in Europe and the one that will shortly follow in the US.
“Those steps forward have only been possible through the rigorous implementation of all the health protocols applied by shipowners, making ships a safe place, and through the technologies, for the air sanitation and for countering the chance of infections, that have been developed to date. It should as well be noted how the cruise booking trend for 2022 is in line with and, in some cases, even better than the pre-pandemic levels.”
“I would like to point out that at the heart of our operations lies an important task we are carrying out, at the service of the Italian government, alongside with other large national and international Groups; we truly believe that a collaboration among the best industrial companies, for projects developed as part of the recovery plan, will actively contribute to our country’s renaissance,” he concluded.