Fincantieri Improves Shipbuilding Revenue

Italian shipbuilder Fincantieri S.p.A. has recorded EUR 1.659 billion revenue coming from its shipbuilding segment in the first half of 2016, a 6.7% increase compared to EUR 1.555 billion reported for the same period a year earlier, on the back of a rise in cruise ship production volumes.

The company’s cruise ship business brought EUR 1.026 bn in revenue in the first six months of 2016, as compared to EUR 826 million revenue in 1H 2015, while the revenue from the naval vessels business remained flat at EUR 554 million.

Fincantieri had 13 cruise ships under construction at its Italian yards in 1H 2016, of which four were delivered in the period, versus 11 ships at 30 June 2015.

Revenue from other activities decreased to EUR 79 million from EUR 175 million at 30 June 2015, mainly reflecting a lower contribution from repairs and conversions that, in the previous period, had benefitted from the execution of the Renaissance Program for the client MSC.

First half profitability of the company’s shipbuilding business continued to be affected by low margins of the large number of highly complex cruise prototypes delivered in the period.

Having left behind the industry’s longest period of crisis with 2015 second-half results, shipbuilding margins are seeing a gradual improvement after completing delivery of low-margin prototype cruise ships ordered during the severe market downturn, Fincantieri said.

Overall, the company’s revenue and income amounted to EUR 2.266 bn in the first half of 2016, as compared to EUR 2.222 bn reported for the first half of 2015. Group share of profit for the period was EUR 7 million as opposed to net profit of EUR 12 million at 30 June 2015.

During the first half of 2016, Fincantieri was awarded EUR 5.851 bn in new orders, compared to EUR 4.17 bn in the corresponding period of 2015.

The company’s total backlog amounted to EUR 21.8 bn at 30 June 2016, with the order delivery profile extending until 2026. The backlog and total backlog guarantee about 4.6 and 5.2 years of work respectively in relation to the 2015 level of revenue, with most of it in the shipbuilding segment, Fincantieri said.

Looking ahead, Fincantieri confirms the guidance for 2016 outlined in the Business Plan 2016-2020, i.e. revenue growth of 4-6% compared to 2015 revenues, an EBITDA margin of around 5% and a positive net result.