Cruise ship builder Fincantieri suffered a revenue fall to €5,191 mill last year, down 11% when compared to the 2019 revenues of €5,849 mill.
Revenues were negatively impacted by COVID-19, resulting in a fall of 3.2 mill in production hours, some 20% down compared to that originally planned in all of its Italian locations.
EBITDA was €314 mill for 2020, compared to €320 mill in the previous year, The production programme postponement led to lower contribution of €80 mill.
Subsidiary VARD’s EBITDA was mainly at breakeven as a result of the 2019 restructuring plan and alignment of its operations into Fincantieri best practices.
Group net income was a negative €245 mill, compared to a negative €148 mill in 2019, net of COVID-19 related costs (€196 mill) and asbestos-related claims (€52 mill), while the adjusted net income was a negative of €42 mill, an improvement notwithstanding the pandemic on the negative €71 mill reported for 2019.
As of 31st December last year, the net debt was €1,062 mill, compared to €736 million as of 31st December, 2019. It was also an improvement versus the previous quarter, representing a capital structure consistent with cruise-specific financial dynamics, the shipbuilder said
This was also impacted by the postponement of part of the expected instalments (nearly €450 mill) and falls within the Group’s strategy to support shipowners, as well as preserve the backlog acquired thus far, in addition to the capex intended to improve efficiency, production capacity and safety of the Group’ yards.
Fincantieri said that liquidity and the available credit lines totalled €2.3 bill, which were enough to meet the Group’s financial requirements.
The year 2020 was an out-of-the-ordinary year, with the pandemic having hit the global economy and affected Fincantieri with a lower production for 20% of what was planned, the Group said.
However, 4Q20 saw a full production recovery, pointing to 2021 as the year in which the Group will resume its growth pattern with improved margins and profits.
Cruise ship deliveries remained on schedule as per the pre-pandemic programme, despite the production postponement. Four out of the seven cruise ships delivered in 2020 were handed over in the second half of the year, amid the pandemic, including the 100th cruise ship built by Fincantieri, for Princess Cruises.
There were no orders cancelled and steady progress in production programmes, reassessed after downtime in the Italian shipyards, occurred in the first half of 2020
The total backlog was 116 units, with deliveries up to 2029, and €35.7 bill in revenue, around 6.1 times 2020 revenues.
Order intake was €4.5 bill consisting of 18 ships, of which five were naval and two were offshore wind farm vessels.
Last year, there were 19 vessels delivered from the 11 shipyards within the Group, seven of which were cruise ships, which included two expedition ships.
Fincantieri also said that the countermeasures implemented to protect the health and safety of the employees proved effective. Only 4% tested COVID-19 positive in the Italian shipyards and quays.
During the subsequent Board meeting, Giuseppe Bono, Fincantieri CEO, said: “Throughout 2020, the pandemic put a severe strain on the global economy, painfully impacting all industries and especially large-scale enterprises.
“In such a scenario, we have proven our prompt responsiveness, by rescheduling our production programmes and adjusting our operational processes accordingly. Fourth quarter results showed further progresses with respect to those already made in the previous quarter, as evidenced by the order intake at €4.5 bill, the total backlog confirmed at more than €35 bill with 97 vessels, and deliveries stretching up to 2029.
“Therefore, we should be proud of the Group’s response, as we managed to deliver seven cruise vessels thanks to the strong relationships with our clients, and achieved prestigious successes in Naval, including the historic contract for the US Navy frigates.
“Moreover, in 2020, we focused even more on high-tech sectors. One for all, infrastructures: with the new Genoa bridge, we gave evidence of our ability to deliver very complex products on schedule.
“As long as scientific progress is made in treatments and vaccines, we expect a growth of 25%, led by our considerable backlog, as well as improving marginality and return to profit,” Bono concluded.
