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Further recovery for Fincantieri in Q4 with return to profit seen in 2021

PHOTO: FINCANTIERI CRUISE_Enchanted_Princess.jpg
Enchanted Princess was one of seven cruise ships delivered by Fincantieri yards in 2020
Fincantieri resumed full production in the fourth quarter and despite the pandemic was able to deliver 19 units from 11 yards in 2020, including seven cruise ships.

No orders were canceled, and the shipbuilding giant expects to resume growth in 2021 with improved margins and a return to profit.

'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 programs and adjusting our operational processes accordingly,' CEO Giuseppe Bono said. 'Fourth quarter results show further progress with respect to that already made in the previous quarter, as evidenced by the order intake at €4.5 billion, the total backlog confirmed at more than €35 billion with 97 vessels and deliveries stretching up to 2029.'

2021 outlook

During 2021, revenues are expected to increase by 25% to 30% over 2020, with margins forecast to improve to a value of close to 7% and a swing back to profit.

Fourth quarter

Fourth quarter earnings before interest, taxation, depreciation and amortization were €114m on €1.657bn of revenue.

The quarter's €4.5bn order intake consisted of 18 units. None were cruise ships, following 2019's record 13 cruise orders. Total backlog is €35.7bn including €7.9bn in soft backlog (options).

2020 loss widens

2020 net loss widened to €245m from a loss of €148m in 2019. Revenues of €5.191bn were 11% lower than 2019's €5.849bn as production hours fell 20% in Italian sites due to the pandemic. Vard's EBITDA was at break-even as a result of the 2019 restructuring plan and alignment of operations with Fincantieri best practices.

Revenues in the cruise ship business area were €3.281bn compared to €3.631bn in 2019. This 9.6% decrease included a negative €41m impact related to the euro/Norwegian kroner exchange rate.

2021 cruise ship deliveries

Cruise ships scheduled for delivery this year include Silver Dawn, Viking Venus, Rotterdam, MSC Seashore and Valiant Lady, all from Fincantieri's Italian yards, and Le Commandant-Charcot and Hanseatic Spirit from Norway's Vard.