• 2019 November 9 11:53

    Fincantieri reports 9.7% growth in revenues in Jan-Oct and total backlog above EUR 32bn with ships to be delivered up to 2027

    Revenues of in the first nine months of 2019 increased by 9.7% if compared to the same period of last year, thus confirming the growth expectation for 2019 in the Shipbuilding and in the Equipment Systems and Services segments, Fincantieri said in its press release.

    Group EBITDA at September 30, 2019 was euro 287 million (+2.1% compared to September 30, 2018) with an EBITDA margin of 6.7%, including the positive performance of the Shipbuilding segment (+30.2% if compared to September 30, 2018 despite the negative impact of the Vard Cruise projects) and is impacted by the negative margin in the Offshore and Specialized Vessels segment.

    With reference to the subsidiary VARD, following the delisting completed in December 2018, the process of full integration within the Fincantieri Group and alignment to the best practices continued. A change in management followed, together with the launch of a reorganization process. In particular, a review of the industrial management systems and of the economic planning of both Cruise and Offshore and Specialized Vessels projects was launched. Such initiatives, supported by the Italian personnel of the Group, led on the one hand to the recovery of the production delays, which would have impeded the on-time delivery of the units, and to the review, on the other hand, of the estimated costs at completion which were included within the results as of September, 30 2019, including the higher costs occurred to recover the delays on the ships in delivery. Further analysis on the industrial management systems and on the economic planning of projects are still ongoing.

    With regards to the initiatives already completed, the exit from the business of small fishery and aquaculture support vessels (which impacted negatively the EBITDA of the first nine months of 2019 by euro 19 million) and the dismissal of Aukra shipyard were approved. Also with reference to the review of the production footprint, the dismissal of Brevik, a second Norwegian shipyard was authorized. Moreover, the conversion of the Romanian Tulcea shipyard, which is now working at full capacity on Cruise shipbuilding is in its final stages of completion.

    Revenues in the Shipbuilding segment at September 30, 2019 were equal to euro 3,686 million, with an increase of 11.1% if compared to the first nine months of 2018. The revenue growth in the Cruise shipbuilding (+11.0%) is due to the increase of the dimension and value of the vessels currently under production, whereas the increase of the naval revenues (+11.0%), is mainly due to the advancing of the construction for both the Qatari Ministry of Defense program and the Italian Navy fleet renewal program.

    The EBITDA of the segment at September 30, 2019, was euro 336 million (+30.2% if compared to September 30, 2018) with an EBITDA margin of 9.1%, reflecting the increasing profitability of the Group shipbuilding activities both in Cruise and Naval areas of business. However, the margin of the segment was affected by the unsatisfactory profitability of some of Vard’s Cruise business unit projects. In particular, the support of the Italian personnel of the Group led on the one hand to the recovery of the production delays in order to deliver on-time the units under construction, on the other hand it required a review of the estimated costs at completion that impacted on the September 30, 2019 results, inclusive also of the higher costs occurred to recover the delays on the ships due for delivery. On the operating side, it is currently under completion the conversion of the Romanian Tulcea Shipyard to support the activities of the Italian Group facilities to develop the significant construction volume required by the record order backlog. Such conversion will bring to a substantial increase of the shipyard value, also because of the acquisition of the specific know-how.

    Offshore and Specialized Vessels revenues at September 30, 2019 stood at euro 392 million, decreasing in comparison to the same period of 2018 because of the slowdown of production volumes due to the almost total lack of orders in the core market.

    EBITDA of the segment at September, 30 was negative for euro 75 million, with an EBITDA margin of -19.3%. The results of the first nine months 2019 included the estimated costs at completion of the projects and represented, pending the finalization of the ongoing analysis, the best estimate of the negative impacts on the full year results. Also the reduced utilization of the shipyards had a negative impact on the results, together with the high level of operative complexity linked to the development of the specialized vessels order portfolio, that is particularly challenging due to the diversity of projects and units contemporarily under production.

    With the aim of margin recovery of the segment in the medium term and in the context of Vard reorganization plan currently being developed, the first initiatives of production footprint optimization were identified and approved. Among these the decision of exiting from the business of small fishery and aquaculture support vessels (which negatively impacted the EBITDA of the segment for euro 19 million in the first nine months of the year) and therefore dismissing the Aukra shipyard. Also with reference to the review of the production footprint, it was approved the dismissal of Brevik, a second Norwegian shipyard, whereas the activity and the personnel of the Brazilian shipyard of Promar were reduced to the minimum in order to contain its management costs.

    Revenues of the Equipment, Systems and Services segment at September 30 stood at euro 582 million recording an increase of 27.1% if compared to the first nine months of 2018, thanks to the development of the relevant backlog for services provided within the naval projects and to the volume increase of the ship repair and conversion activity. It is also to be mentioned the significant contribution of the operations of Fincantieri Infrastructure performed in 2019.

    EBITDA of the segment at September 30, 2019 was equal to euro 55 million with an EBITDA margin of 9.5%, reflecting the higher contribution of infrastructure projects and of the ship conversions and refurbishment activities, both characterized by a reduced profitability profile if compared to other activities within the same segment. These projects, however, have a strategic relevance as they allow the development and maintenance of commercial relationships and contribute to the increase of utilization of some Italian shipyards of the Group.

    Net fixed capital was euro 1,831 million (euro 1,703 million at December 31, 2018), increased by euro 128 million. Among the main impacts, besides the investments of the period, there is the inclusion of the right of use of the leased assets following the first application of IFRS 16 net of amortization and the inclusion within the fixed assets of two vessels previously accounted for as Construction contracts following the decision of managing them directly.

    Net working capital was positive at euro 250 million with a variation of euro 206 million if compared to December 31, 2018. The main variations include i) the decrease of the Inventories and advances (euro 18 million), mainly due to the delivery of a vessel previously included in the Inventories following the order cancellation, and then sold; ii) the increase in Construction contracts and client advances (euro 463 million) and of Trade payables (euro 218 million) following the increase of production volumes; iii) the decrease of the Provisions for risks and charges (euro 59 million), mainly for the use of the provisions for the “Serene” litigation, following the settlement agreement terminating all proceeds standing.

    Construction loans, dedicated credit instruments used for the exclusive financing of the project they are referred to, amounted to euro 793 million at September 30, 2019, with an increase of euro 161 million. Of these, euro 500 million were related to the Parent Company and euro 293 million to the subsidiary VARD.

    Net financial position, reported a net debt balance of euro 904 million (euro494 million in net debt at December 31, 2018), consistently with the production volumes developed by the Group and with the delivery schedule of the cruise units (3 units delivered in October). It also includes the financial liabilities arising from the application of IFRS 16 (euro 89 million).

    The Group performance is confirmed to be positive from an operational standpoint thanks to the favorable trends of the cruise and naval shipbuilding across all geographies, although limited by the negative results of VARD in cruise and offshore projects.

    With reference to the subsidiary Vard, the commitment of the Group to align the industrial management systems and the economic planning of the projects to the Group best practices continues, as reported in the “Economic data” section. Any potential additional adjustment on the estimated costs at completion for longer term projects that may arise from this process will be included in the full year 2019 results. The reorganization plan for the subsidiary Vard is expected to be presented together with the approval of the full year Group results.

    Net financial position is expected to slightly improve, following the delivery of 3 cruise vessels in the last quarter of the year, even if financing needs will remain high due to the need to finance the working capital for the vessels under construction and in delivery.

    In the Shipbuilding segment, in October the Group delivered 3 cruise vessels, whereas the naval business area is focused on the full swing of the program for the Qatari Ministry of Defense, with 3 vessels under construction and first delivery scheduled for 2021.

    With reference to Vard Cruise business unit, the initiatives mentioned above are under development.

    In the Offshore and Specialized Vessels segment, the shipbuilding activities pertaining to the current backlog will continue and the ongoing focus on execution aiming at margin recovery will remain, together with the commercial activities focused on the development of innovative products and cutting-edge technologies in areas not directly related to the Oil&Gas sector. The analysis phase of the business and the reorganization plan for the subsidiary Vard are still ongoing.

    On the Equipment, Systems and Services, we expect the confirmation of the revenues growth trend, thanks to the backlog deployment for the naval programs, to the volumes for the production of cabins and public areas to support the cruise shipbuilding activities, and to the development of the infrastructures with a significant advancing of the construction of the bridge over the Polcevera River in Genoa.




2020 September 25

15:27 GTT signs a contract with the U.S. Dep't of Defense for the Red Hill Bulk Fuel Storage Facility
14:59 RFC held the second stage of the ecological marathon
14:31 Bunker prices are flat in the Port of Saint-Petersburg, Russia (graph)
14:05 Zvezda shipyard to build 10 gas tankers for Arctic LNG 2
13:42 Wärtsilä solutions meet challenging needs of Canadian Coast Guard vessel
13:18 Nuclear-powered container carrier Sevmorput delivered Kamchatka fish to Saint-Petersburg
12:56 Competition for construction of two scientific research ships for Russian Federal Fisheries Agency to be announced in October
12:34 Royal Niestern Sander orders SCHOTTEL thrusters for world’s first shallow-draught ice-breaking W2W vessel
12:11 VEB.RF starts financing construction of ten gas tankers for Arctic LNG 2 project
11:29 LR awards Samsung Heavy Industries AiP for its ammonia-fuelled tanker
10:37 British Ports Association sets out spending review priorities
10:29 New state programme on Arctic development in 2021-2024 drafted by Russia’s ad hoc Ministry
09:53 Debt service guarantees on Yamal LNG removed from NOVATEK
09:30 Oil prices rise in hope of demand
09:12 Baltic Dry Index as of September 24
09:11 MABUX: Bunker market this morning, Sept 25

2020 September 24

18:37 Kongsberg Digital develops cloud-based simulators for maritime industry, with funds from Innovation Norway
18:07 Wärtsilä ranked first in UN challenge to fight climate change with big data
17:45 Alco Bio Fuel, Messer Benelux and IJsfabriek Strombeek once again invest in recycling CO2 in North Sea Port
17:20 World’s first subsea compression system passes five years in operation
17:12 Esben Poulsson reappointed as ICS Chairman for a new term
16:48 Okskaya Shipyard launches first multipurpose dry cargo carrier of Project RSD59 for Astrol
16:24 Severnaya Verf starts cutting steel for seventh trawler of Project 170701 for NOREBO Group
15:50 ASCO's vessel “Razul Rza” sent to outer waters after repairs
15:26 Russian Direct Investment Fund (RDIF) to invest in Sovcomflot, says RDIF CEO
15:02 Diana Shipping announces the sale of a Capesize Dry bulk vessel
14:39 Russian Railways launches regular multimodal service from China to Europe via the ports of Kaliningrad and Hamburg
14:17 MABUX releases its weekly review of bunker market
14:02 Fincantieri starts dry dock works for experimental vessel Zeus
13:40 Freeport of Riga Authority signs Declaration of Cooperation with Port of Shenzhen
13:21 IMO celebrates World Maritime Day 2020
13:08 Total and MOL officially name the world’s largest LNG bunker vessel
12:48 Bunker prices decrease in the Far East ports of Russia (graph)
12:25 ZIM launches new China-Australia Express Line
12:11 Inmarsat Fleet Lte service coverage extended to Gulf of Mexico following successful trials with V.Ships Offshore
11:32 Ships of RF Navy’s Black Sea Fleet take part in "Kavkaz-2020" maneuvers
11:14 Port of Trelleborg offers their shipping customers reliable and fast internet with Nowhere Networks
11:13 "Tatarstan" missile ship of RF Navy’s Caspian Flotilla involved in "Kavkaz-2020" maneuvers
10:09 CTI-Maritec receives DNV GL approval for ballast water testing
09:57 Muuga freight station of Rail Baltica is to be designed by SWECO Projekt AS
09:36 MPC Container Ships ASA announces appointment of new CFO
09:29 Oil prices decrease amid concern over demand/supply imbalance
09:11 Baltic Dry Index as of September 23
08:40 MABUX: Bunker market this morning, Sept 24

2020 September 23

18:15 HMM opens Fleet Control Centre
17:35 Stena develops a solution to use recycled batteries in charging stations at port
17:05 Philippine Ports Authority COVID-19 Molecular Testing Center for seafarers now operational
16:42 British Ports responds to reasonable worst-case scenario Brexit assumptions
16:17 Vestdavit wins contract to supply six Australian Navy patrol boats
16:03 ABB powers P&O super-ferries towards new sustainable transport era
15:43 Royal Niestern Sander orders SCHOTTEL thrusters for world’s first shallow-draught ice-breaking walk-to-work vessel
15:25 FESCO’s Board of Directors elected new Management Board
15:03 Kalmar’s fuel-efficient terminal tractor solutions selected by Yilport for fleet expansion at Puerto Bolívar and Gävle container terminals
14:47 RF Government to revise comprehensive plan for upgrading and expanding core infrastructure
14:30 U.S. Coast Guard awards four more fast response cutters to Bollinger Shipyards
14:01 ESPO expresses commitment of European ports to play their part in helping shipping sector decarbonise
13:28 Travelling by ferry between Finland and Sweden is now permitted without restrictions
13:19 Damen delivers ASD Tug 2810 to Thomas Service Maritimes
13:02 Van Oord’s Deep Dig-It trencher buries cables to 5,5 metres depth for offshore grid connection
12:44 Nakhodka Shipyard launched two self-propelled freight/passenger barges ordered by Kamchatka Transport Ministry