Fincantieri: the BoD approves 9M 2020 results
100th cruise delivered -ATTACHMENT
Total backlog fully preserved at EURO 36.8 billion
The Board of Directors of Fincantieri SpA, chaired by Giampiero Massolo, has examined and approved the interim financial information at September 30, 2020.
No order cancellations and consistent progress in production, rescheduled following production downtime of Italian operations occurred in the first half of this year
Cruise industry – “No Sail Order” lifted in the United States, no suspension of operations in Italy. Leading cruise operators are currently planning a gradual resumption
Two cruise ships delivered from the Group’s Italian shipyards amid the emergency – “Enchanted Princess”, the 100th cruise ship delivered by Fincantieri and built for Princess Cruises, a Carnival Corporation brand, and “Silver Moon”, for Silversea Cruises, a Royal Caribbean Group brand – and one expedition cruise vessel, built in Norway by Vard for Ponant
Effective measures to curb the spread of the virus have allowed a prompt detection of COVID-19 cases – tested positive are now under 3%:
Body temperature measurement through thermoscanning
Staggered entrances and social distancing
Work-from-home policy (available for 48% of the functions/positions)
Daily supply of PPE in all Group’s sites
Employees satisfaction for the commitment shown by the Company to face the emergency: 91%
Production ramp up still deeply affected by the implementation of the new safety measures
Sound funding capacity with liquidity and credit lines to support the current situation and its foreseeable developments in the medium term, also thanks to the new loan, granted by a pool of banks and guaranteed by SACE, whose value amounts to euro 1.15 billion
Q3 2020 revenues (euro 1,165 million), EBITDA (euro 81 million) and margins (7.0%) show a recovery in production activities broadly in line with pre COVID-19 performance
Consolidated 9M 2020 results
Revenues at euro 3,534 million (euro 4,217 million at September 30, 2019), down by 16.2%, negatively affected by the lower production value led by COVID-19 outbreak: production hours -19% compared to the ones originally planned (3.1 million of production hours of which 2.7 million hours related to 2020 first half) and euro 945 million loss in revenues
EBITDA, at euro 200 million, impacted by the downturn in production volumes of the Group’s Italian sites (euro 306 million at September 30, 2019) with an EBITDA margin of 5.7%, up from 5.0% of the first half of the year (7.3% at September 30, 2019). The postponement of production programs led to an EBITDA shortage of approximately euro 71 million
COVID-19 related expenses, at euro 149 million, are accounted in the extraordinary expenses and are mainly attributable to a lower operating leverage led by the downturn of production volumes during operations downtime and gradual ramp up, as well as to expenses for ensuring staff health and safety
Total backlog at euro 36.8 billion, almost 6.3 times 2019 revenues, with an order intake of euro 1.9 billion: backlog at euro 26.9 billion (euro 28.4 billion at September, 2019) with 88 units to be delivered up to 2027, and soft backlog at euro 9.9 billion (euro 3.9 billion at September 30, 2019)
Net Debt at euro 1,425 million (euro 736 million at December 31, 2019), affected by the postponement of cruise ships deliveries and of part of expected installments. Such rescheduling, resulting in a working capital absorption, falls within of the Group’s strategy to preserve the sizable backlog, as well as to strengthen the relationship with its clients, now engaged in improving the efficiency of their fleets also through new ships, fully compliant with new environmental, health and safety standards. The effects on net debt of these measures along with the rescheduling of deliveries - led by the production slowdown - is approximately euro 600 million, as expected. This gap will be bridged in the next few years, through the delivery of the ships in backlog.
Delivered 14 units from 9 different shipyards, of which 5 cruises, 2 naval vessels, and 3 fisheries
Fincantieri Marinette Marine prime contractor in the FFG(X) program for the first-in-class guided missile for the US Navy, and options for 9 additional units. FMM has also been shortlisted for the design and engineering of LUSV, future large-size unmanned surface vessels
European tender for the supply of a EO/IR seeker emulator for the assessment of the Defense countermeasures systems effectiveness awarded to INSIS (renamed Fincantieri NexTech). The subsidiary signed a multi-year agreement with Autostrade Tech and IBM for the implementation, sale, and joint maintenance of an innovative system for the monitoring and safeness on highway infrastructures
Marine Interiors will supply Shanghai Waigaoqiao Shipbuilding Co. Ltd (SWS) with 2,800 cabins for the cruise ship under construction, for which the JV CSSC, a joint-venture between Fincantieri China and CSSC Cruise Technology Development Co. Ltd, is licensing the technological platform and a series of technical services
JV Naviris: second contract signed with OCCAR for a feasibility study on the mid-life upgrade (MLU) of four Horizon frigates (two units for the Italian Navy, and two for the French Navy)
Other key events
Safe Air: Fincantieri, in close collaboration with the ICGEB virology lab, has developed an new air sanitation system, "Safe Air", which will significantly improve air quality and purity on cruise ships
Vard signed an agreement for the engineering and construction of an additional innovative fishery unit for Luntos Co. Ltd. The first unit was ordered back in 2019
Infrastructures: San Giorgio bridge in Genoa, was inaugurated on August 3, 2020 at the presence of both the Italian President Sergio Mattarella and the Italian Prime Minister Giuseppe Conte. With reference to the partnership agreement established for the “Dall’Ara” stadium and anti-stadium project, the municipality of Bologna (IT) declared it as matter of public interest
Zeus keel laying: the experimental zero-emission vessel, in construction in Castellammare di Stabia shipyard (NA), will be equipped with a 130 kW fuel cell system, and a battery-system guaranteeing navigation for 8 hours at a speed of 7.5 knots
Fincantieri’s commitment to innovation celebrated with the MIKE award, won within the Global Companies cluster, for the company’s forward-looking strategy and its sustainable business approach.
Giuseppe Bono, Fincantieri's Chief Executive Officer, stated: “Results at September 30 mirror the adversities, faced by the world economy and by Fincantieri as well, of one of the most challenging periods in history. The mere numerical comparison with the same period last year should not be considered relevant, with 2020 being a truly unprecedented year. Moving past the results, I want to highlight our ability to look forward, securing stability and work for the next years for our shareholders and stakeholders. The cruise industry is gradually recovering, as it should be, and that validates our strategy that has allowed us to preserve our backlog, keeping production visibility up to 2027/2028. As for the naval business, in addition to the recent prestigious order for the US Navy, we are currently negotiating with different countries to export FREMM frigates. Besides, we are also reaching pivotal milestones in innovative business areas with remarkable prospects, namely in infrastructures and within the context of cutting-edge products and services".
Bono concluded “In the meantime, we implemented strict measures to safeguard our workers, the real asset of our Group, applying several protocols that contained infections within our sites. Furthermore, I must acknowledge the commitment embraced by the entire staff, working enthusiastically to cope with this challenging situation meanwhile ensuring a thriving future for the Group".
The integral version of the report (11 pages, with tables) is attached to this AVIONEWS.
AVIONEWS - World Aeronautical Press Agency