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Fincantieri's Q3 broadly in line with pre-COVID performance

PHOTO: FINCANTIERI CRUISE_Enchanted_Princess.jpg
Enchanted Princess was delivered during the quarter
Fincantieri's third quarter results reflect a recovery in production activities broadly in line with pre-COVID-19 performance.

The group posted earnings of €81m before interest, taxation, depreciation and amortization, a 7% margin on revenues of €1.165bn. 

Zero cancellations

Fincantieri's €36.8bn total backlog has been fully preserved, with no order cancellations. This includes 88 units to be delivered up to 2027, counting options.

In the cruise business area, after delivering Enchanted Princess on Sept. 30, its 100th ship of the modern era, and Silver Moon in late October, Fincantieri is completing Costa Firenze to satisfy its cruise-related commitments for 2020.

First nine months

In the first nine months, EBITDA was €200m, compared to €306m in the first nine months of 2019, on revenues of €3.534bn, 16.2% lower than the €4.217bn in the prior-year period.

Results were impacted by the downturn in production volumes of the group’s Italian sites due to the impact of COVID-19. The production slowdown led to an EBITDA shortage of approximately €71m, including €6m in Q3.

Revenues in the shipbuilding segment were €3.104bn, down 17.8% compared to the first nine months of 2019. Revenues from cruise ships were €2.258bn, compared to €2.677bn in the prior-year period.

COVID-19 costs

COVID-19 related expenses of €149m were attributable to the lower operating leverage led by the downturn of production volumes during Italy's shutdown and the shipyards' gradual ramp-up, as well as costs to ensure employees' health and safety.

The nine-month results mirror the adversities faced by the world economy and Fincantieri, CEO Giuseppe Bono noted.

'The mere numerical comparison with the same period last year should not be considered relevant, with 2020 being a truly unprecedented year,' he said. '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.'

New €1.15bn loan

The group reported a sound funding capacity through liquidity and credit lines, enough to support it through the current situation and foreseeable developments in the medium term. A new €1.15bn four-year loan from a pool of national and international banks is guaranteed by SACE, Italy's export credit agency.

Fincantieri reported effective measures to promptly detect coronavirus and stem its spread among the workforce, with fewer than 3% positives. Measures include temperature checks by thermoscanning, staggered work times, social distancing, work from home available to 48% of employees and personal protective equipment supplied daily at all work sites.

Production ramp-up, however, is still 'deeply affected' by the implementation of the new safety measures.

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