Oil/gas downturn and costs of entering cruise sector
Vard suffers from the persistent downturn in the oil and gas sector and from the costs of entering the cruise shipbuilding market.
‘The reorganization of Vard is a priority for the entire group and we dedicated to this initiative some of our best Italian employees,’ Fincantieri CEO Giuseppe Bono said Thursday.
Losses in offshore and specialized vessels business
Revenues in the offshore and specialized vessels segment were €392m, down from €475m in the first nine months of 2018, while EBITDA losses widened to €75m from a loss of €4m a year ago.
Vard's restructuring has entailed a management change and the ongoing review of industrial management systems and financial planning. Vard is exiting the business of small fishery and aquaculture support vessels, which had a negative €19m impact on EBITDA in the first nine months. This means closing the Aukra shipyard, while the closure of another Norwegian yard, Brevik, has been authorized.
Meanwhile, the conversion of Romania’s Tulcea yard, which is now working at full capacity on cruise shipbuilding, is in the final stages of completion.
Group revenues up 10%
Overall, the Fincantieri Group’s revenues were up 10% in the first nine months, to €4.25bn, while EBITDA was 2% higher, at €287m.
This included the shipbuilding segment's positive performance, with revenues rising to €3.69bn from €3.32bn and EBITDA up 30%, to €336m. This, despite the negative impact of the Vard cruise projects and losses in the offshore and specialized vessels segment.
Cruise shipbuilding revenues accounted for €2.6bn, up from €2.3bn.
During October alone, Fincantieri delivered three cruise ships from three yards to three different owners.