Fincantieri Reports Strong 2019; Cautious 2020 Outlook

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Fincantieri has reported net income of 151 million euros on revenue s of 4.3 billion euros for the year ended Dec. 31, 2019, compared to net income of 69 million euros on revenues of 5.4 billion euros for 2018. 

The subsidiary Vard contributed a loss and has seen a restructuring plan being implemented. 

Because of the COVID-19 outbreak, Fincantieri has interrupted production at all its yards since March 16, awaiting further direction from the respective authorities. This also means that work has stopped on all cruise vessels. The company said its priorities were to safeguard its employees as well as its clients and strategic partners.

The order intake for last year consisted of 28 units, including 13 cruise ships for six different brands for a total value of 6 billion euros. The total backlog is for 98 units.

During the year, Fincantieri said it delivered 26 units from 12 different shipyards of which four were large cruise ships and four were expedition ships.

The Fincantieri Group as a whole posted revenues of 5.8 billion euros up from 4.3 billion euros the prior year. The shipbuilding section represented 5.1 billion euros of the total.

Fincantieri also reported that its cruise ship business recorded an increase in revenues of 10.8 percent to 3.6 billion euros, accounting for 56 percent of the Group’s revenues, compared to 54 percent the prior year.  The increase came despite negative exchange rates for the euro and Norwegian krone.

According to a company statement, eight cruise and expedition newbuilds are scheduled for delivery in 2020, nine in 2021, 10 in 2022, six 2023, four in 2024 and nine beyond 2024.

As for the business outlook, Fincantieri said that the virus outbreak may affect is production schedule as well as the supply chain, personnel and trade negotiations.

The current situation constitutes a cause of force majeure, which, according to Fincantieri, is a clause in the construction contracts allowing it to reschedule production plans and delivery dates.

The Group plans to present a new 2020-2024 business plan as soon as the emergency permits a clear evaluation of the possible impacts.

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