Italian shipbuilder Fincantieri reported a 16% drop in revenues for the first nine months of 2020 reaching €3.53 billion, considerably impacted by the Covid-19 outbreak.
The shipbuilder’s EBITDA stood at €200 million, down from €306 million reported in the same period in 2019, with an EBITDA margin of 5.7%, up from 5.0% first-semester margin (7.3% at September 30, 2019).
The shortfall in EBITDA of about €71 million has been ascribed to the Covid-19 impact, mostly visible in the first half of the year.
However, the shipbuilder said that it hasn’t received any order cancelations.
For the third quarter of 2020, the company’s revenues stood at € 1.16 billion, while EBITDA reached €81 million, showing a recovery in production activities broadly in line with pre COVID-19 performance
“Results at September 30 mirror the adversities, faced by the world economy and by Fincantieri as well, of one of the most challenging periods in history. The mere numerical comparison with the same period last year should not be considered relevant, with 2020 being a truly unprecedented year. 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,” Giuseppe Bono, Fincantieri’s Chief Executive Officer, said.
Bono pointed to the gradual recovery of the cruise industry, which he said validates the company’s strategy to preserve the company’s backlog, keeping production visibility up to 2027/2028.
Namely, after more than 7 months, on October 30, in the United States, the CDC lifted the No Sail Order, releasing simultaneously a Framework for Conditional Sailing according to which the resumption of passenger operations is subject to the implementation of tight health and safety protocols. As for the Italian market, no suspension is currently required by the regulation.
Fincantieri delivered the 100th cruise ship, Enchanted Princess, on September 30, and the cruise ship Silver Moon at the end of October. The shipbuilder plans to deliver the 6th cruise ship Costa Firenze meeting its commitments for 2020.
In the naval business area, the programs for the Qatari Ministry of Defense and for the renewal of the Italian Navy fleet are ongoing, aiming to recover the slowdowns caused by the lockdown and by the phased resumption of the production activities.
Bono added that the company was negotiating with different countries to export FREMM frigates.
Moving forward the group’s activities to date are running regularly although they continue to suffer from the implementation of the new safety protocols related to the identification of asymptomatic Covid-19 cases, the Italian major explained.
Fincantieri said that it has a sound funding capacity through liquidity and credit lines, thanks to the new loan, granted by a pool of national and international banks, whose value amounts to €1.15 billion.
The loan, with a maturity of four years, two of which of pre-amortization, is guaranteed by SACE pursuant to the Law Decree no. 23 of April 8, 2020.
The group also plans to meet the challenges of global markets through its diversification strategy, by expanding its portfolio in the infrastructures sector through new acquisitions and partnerships.
These include the recent multi-year agreement signed among Fincantieri NexTech, Autostrade Tech, a company of Autostrade per l’Italia Group (Aspi), and IBM.