Firing on all cylinders, Fincantieri boosts first half profit

Fincantieri's Giuseppe Bono, left, with Richard Branson during Virgin Voyages festivities at the Sestri Ponente yard last week Fincantieri's Giuseppe Bono, left, with Richard Branson during Virgin Voyages festivities at the Sestri Ponente yard last week PHOTO: Fincantieri

Fincantieri's first half adjusted profit increased 39% to €39m on a 10% increase in revenues to €2.5bn as the strong market for cruise shipbuilding continues.

Counting one-time charges of €32m mainly due to asbestos-related litigation, profit for the period was €15m, up from €11m in the first six months of 2017. Earnings before interest, depreciation and amortization were up 25%, to €183m, while EBITA margin reached 7.3%, up from 6.3%.

'Outstanding ability to acquire new orders'

'Fincantieri proved once more its ability to transform its industrial and commercial strategy into a solid economic and financial performance,' CEO Giuseppe Bono said. 'Revenues, profits and margins are increasing compared to last year, and will witness a further improvement in the second half of the year, confirming the business plan guidelines.'

Bono also highlighted Fincantieri's 'outstanding ability to acquire new orders,' a testament to 'our ability to build and deliver on-time, high-value-added products.'

Record €32bn backlog

With orders acquired during July, the backlog now exceeds a record €32bn, with scheduled deliveries stretching to 2027.

This gives Fincantieri visibility for the years to come and ensures workload for all its Italian yards. Counting July orders, the group’s portfolio consists of 99 ships.

New cruise customer, LNG orders

In July, Fincantieri acquired an important new customer, TUI Cruises, with an order for two new-concept, LNG-powered cruise ships. The option for two Project Leonardo ships for Norwegian Cruise Line was firmed, and Fincantieri signed a memorandum of agreement with Princess Cruises for two new-generation, 175,000gt LNG-fueled ships that will be the largest ever built in Italy.

Fincantieri also confirmed an order from Cunard, while subsidiary Vard firmed the contract for two expedition cruise vessels from Viking Cruises. (Confirming they are expedition ships, as widely speculated.)

Other orders were for defense-related customers.

Six cruise ships were delivered in the first half: Carnival Horizon, Seabourn Ovation, MSC Seaview and Viking Orion, along with two naval vessels and an oceanographic ship.

A share purchase agreement for the acquisition of 50% of the share capital of STX France for €59.7m was signed. A loan of 1% of the share capital of STX France to Fincantieri will be inked at the closing of the transaction, when the shipyard will officially revert to its historic name, Chantiers de l'Atlantique.

The deal is part of a broader collaboration on shipbuilding between Italy and France in the context of a consolidation in the European shipbuilding industry.

Posted 26 July 2018

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Anne Kalosh

Editor, Seatrade Cruise News & Senior Associate Editor Seatrade Cruise Review