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Work ramping up at Fincantieri after Q1 production volume fell 20% on pandemic

PHOTO: FINCANTIERI CRUISE Scarlet Lady and sister.jpg
Scarlet Lady, right, was among three cruise ships delivered by Fincantieri in the quarter
Fincantieri's first quarter EBITDA margin was 5.5%, down from 6.7% a year ago, and production volume slowed by 20% due to the COVID-19 pandemic.

Earnings before interest, taxes, depreciation and amortization fell 28% on 4.5% lower revenues.

EBITDA was €72m on revenues of €1.3bn, down from EBITDA of €92m on revenues of €1.37m a year ago. In addition to the EBITDA shortfall, Fincantieri recorded €23m in COVID-19 impacts as extraordinary expenses.

Among first Italian companies to halt and to resume

CEO Giuseppe Bono said as the virus emergency started to unfold, Fincantieri made 'every possible effort' to safeguard personnel and subcontractors and was among the first Italian companies to halt activities and then to safely resume them.

Starting March 16, all Italian shipyards and production plants were closed to protect employees, with work resuming gradually from April 20. Delivery dates are being reassessed with customers.

Cruise business 57% of revenues

Revenues in the cruise shipbuilding sector were €830m, up €4m a year ago and accounting for 57% of the group’s revenues, up from 55% in Q1 2019.

Cruise revenues mirrored a speed up in production, led by the heavy workload and deliveries from the Italian shipyards, along with nearly 28% increase in production in Vard's cruise business unit. These gains helped offset the subsequent reduced production at the Italian yards starting March 16. Vard's cruise business also included a negative €11m related to currency (euro-kroner).

Among eight vessels delivered during the quarter were three cruise ships — Regent's Seven Seas Splendor, Virgin Voyages' Scarlet Lady and Ponant's Le Bellot.

€31.9bn total backlog

Total backlog at the end of Q1 was €31.9bn (including €4.2bn in options), equal to about 5.5 times 2019 revenues, with order intake of $0.3bn during the quarter.