Fincantieri reports jump in revenue

2021-08-12T18:36:27+00:00 August 12th, 2021|Finance|

Driven by the Shipbuilding Division, giant Italian conglomerate Fincantieri reported a 27.7% increase in revenue and income for the first half of this year.

Revenue and income came in at €3,026 mill, excluding pass-through activities at €225 mill- a rise of 27.7%, compared to the first half of 2020.

The revenue rise was mainly due to the positive performance of the Shipbuilding segment (+32.5%, excluding pass-through activities), reflecting the full resumption of production activities in the Group’s Italian yards and thus the recovery of 2020 volumes lost due to the shutdown of activities led by the COVID-19 outbreak.

The Equipment, Systems and Services segment also recorded an increase in revenues (+22.8%) mainly attributable to supporting shipbuilding activities for cruise ships and naval vessels.

As of 30th June, 2021, 88% of revenues were generated from overseas customers, rising from the 84% in the first half of last year.

EBITDA, at €219 mill (€119 mill as at 30th June, 2020), benefited from both higher production volumes and enhanced marginality, including the effects of soaring commodity prices. EBITDA margin, excluding pass-through activities, improved from 5.5% in 1H20 to 7.2% in 1H21, recovering well beyond the contribution lost due to production downtime in 2020 in the Group’s Italian shipyards led by the COVID-19 outbreak (€65 mill).

The higher contribution was again mainly attributable to the Shipbuilding segment (EBITDA margin at 7.7% excluding pass-through activities). Subsidiary VARD Offshore also recorded a positive EBITDA, following the strategic decisions taken by the management starting from 2019, as part of the restructuring plan, which followed the de-listing of the Norwegian Group.

EBIT stood at €123 mill, compared with €54 mill in the same period of 2020, with an EBIT margin (EBIT on Revenue and income, excluding pass-through activities) at 4.1% (2.3% in 1H20).

Adjusted net income for the period was positive at €49 mill as of 30th June, 2021 (negative €29 mill in 1H20).

Profit for the period was €7 mill, compared to a net loss of €137 mill in 1H20. The Group share was a net profit of €6 mill, compared to a net loss of €135 mill in the same period of the previous year.

Net working capital was positively balanced at €263 mill (negative €202 mill as at 31st December, 2020) – an increase of €465 mill. The main changes were related to decrease in construction contracts and client advances (€297 mill), due to the progress of projects during the period and to the invoicing of the final instalment of a cruise ship delivered in July, among other initiatives.

During a Board meeting, Giuseppe Bono, Fincantieri CEO, said: “In light of the strict protocols put in place to face the pandemic, first of all the vaccination programme, we yearn to confirm our prompt recovery. This is shown by the facts we presented with regard to both the financial results and the outstanding performance in the naval area, in which we pride ourselves of our global leadership in the surface vessels segment, along with our well known leading role in the cruise industry.

“Furthermore, we are deeply satisfied to be collaborating with top-notch partners on new technologies and on their related projects, such as the one on the next generation of electricity-powered Italian port infrastructure,” he said.

Fincantieri added that the cruise business was severely affected by the pandemic; however, based on the schedules released on 13th July by cruise ship operators, a significant resumption of activities is now to be expected.

The resumption of cruise operations, along with the growing booking trend and the confidence in the main cruise companies demonstrated by the financial markets, shows yet again the sector’s resilience. Indeed, most cruise operators witnessed an increase in bookings, a trend that was not just consistent with historical ones, but for some operators was higher.

With regard to the cruise ship business area, four vessels are to be delivered from the Group’s Italian shipyards (three of which were delivered in July: ‘Valiant Lady’ for Virgin Voyages, ‘MSC Seashore’ for MSC and ‘Rotterdam’ for HAL, and one in the fourth quarter – ‘Silver Dawn’ (for SilverSea) and two vessels in the luxury-niche segment by VARD’s cruise division (Ponant Icebreaker, ‘Viking Octantis’).