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Fincantieri: BoD approves 2020 consolidated financial statements and draft financial statements

2021 marks resumption of growth en route already with 4Q2020 results; convening of shareholders' meeting -ATTACHMENT

The Board of Directors of Fincantieri SpA, chaired by Giampiero Massolo, has approved the draft financial statements of the parent company at December 31, 2020 and the Consolidated financial statements at December 31, 2020, prepared in accordance with international financial reporting and accounting standards (IFRS) and the Consolidated Non-financial Statement at December 31, 2020 pursuant to Legislative Decree No. 254/2016.

The year 2020 was an out-of-the-ordinary year, with the pandemic having hit the global economy and affected Fincantieri with a lower production for 20% of what planned. The fourth quarter has seen a full production recovery, pointing at 2021 as the year in which the Group will resume its growth path with improved marginality and profitability.

Consolidated 2020 results

Operational results

  • Cruise ship deliveries stayed on schedule as per the pre-pandemic program, even with the postponement of production programs: 4 out of the 7 cruise ships delivered in 2020 were handed over in the second half of the year, amid the pandemic, including the 100th cruise ship built by Fincantieri, for Princess Cruises, a Carnival Group brand
  • No orders cancellations and steady progress in production programs, reassessed after downtime in the Italian shipyards occurred in the first half of 2020
  • Q4 2020: consistent operational performance with revenues at euro 1,657 million (excluding pass-through activities), and EBITDA at euro 114 million (+42% and +40% with respect to the yet positive Q3 results)
  • Sound financial position: liquidity and available credit lines for euro 2.3 billion, enough to meet the Group’s financial requirements 
  • Total backlog with 116 units, with deliveries up to 2029, and euro 35.7 billion, approximately 6.1 times 2020 revenues: soft backlog at euro 7.9 billion 
  • Order intake at euro 4.5 billion with 18 units, of which 5 naval and 2 for operations in offshore wind farms
  • 19 units delivered from 11 shipyards, 7 of which are cruise ships, including 2 expedition cruise vessels, and 4 naval units
  • 500 direct jobs and 2.500 indirect jobs were created in Italy with an increase in headcount
  • Capex for euro 309 million: efficiency improvements both in the italian and foreign sites (Norway, Romania and United States)

Financial results

  • Revenues at euro 5,191 million, pass-through activities excluded, -11% when compared to 2019 revenues (euro 5,849 million). Revenues are negatively impacted by COVID-19, with a downturn of 3.2 million in production hours (-20% compared to the ones originally planned) in all Italian sites and a shortfall in revenues of euro 1,055 million
  • EBITDA at euro 314 million (euro 320 million in 2019), EBITDA margin of 6.1%, excluding pass-through activities, (5.5% in 2019). Postponement of production programs led to lower contribution of euro 80 million 
  • VARD: EBITDA substantially at break-even as a result of the 2019 restructuring plan and alignment of Vard operations to Fincantieri best practices
  • Negative net income at euro 245 million (negative for euro 148 million in 2019), net of COVID-19 related costs (euro 196 million) and asbestos-related claims (euro 52 million) and negative adjusted net income at euro 42 million, improving notwithstanding the pandemic effects (negative for euro 71 million in 2019)
  • Net debt at euro 1,062 million (euro 736 million as of December 31, 2019), improved versus previous quarter, representing a capital structure consistent with cruise-specific financial dynamics. Net debt is also affected by the postponement of part of expected installments (nearly euro 450 million) and falls within the Group’s strategy to support ship owners as well as preserve the backlog acquired so far, in addition to the capex intended to improve efficiency, production capacity and safety of the Group’ shipyards

COVID-19 Update

  • Major cruise line companies: operations are expected to resume in late Spring 2021 and bookings for the second half of 2021 are in line with historical trends
  • The countermeasures implemented to protect the health and safety of our people have proven effective: 4% tested positive in the Italian shipyards and docks of the Group and 91% employee satisfaction over the commitment shown by the Company

Strategic initiatives

  • Consolidation of the defense industry both on a national and international scale:
  • Italy: new units for the Italian Navy – 2 new FREMM frigates and 2 submarines
  • Europe: Naviris, the 50-50 JV with Naval Group, is fully operating and progressing with the execution of orders received. An MoU for the European Patrol Corvette project was signed earlier this year.
  • US: Fincantieri Marinette Marine is prime contractor of the FFG(X) program for the US Navy. The contract envisages the concept design and construction of the first-in-class frigate as well as an option for 9 additional units, that would bring the cumulative value of the contract to USD 5.5 billion, stretching visibility up to 2035
  • VARD enters new segments of the maritime industry while undertaking a sustainable growth path:
  • Renewable energies: new orders for service operation vessel to be deployed in offshore wind farms
  • Unmanned vessels: new contract for the design and construction of 8 unmanned vessels for maritime operations in both USA and UK waters. A green ammonia fuel system will also be featured 
  • Expanding strategic positioning in infrastructures and maritime facilities in addition to the acquisition of INSO and SOF, company operating into healthcare infrastructures. It is worth to remember the construction of the San Giorgio Bridge in Genoa, delivered in record time by the subsidiary Fincantieri Infrastructure
  • Fincantieri NexTech (former INSIS), a cutting-edge technology company with competences ranging from cybersecurity to security and telecommunication systems, has signed a multi-year agreement along with Autostrade Tech, an Aspi Group company, and IBM. The agreement entails the implementation, sale, and joint maintenance of an innovative system for the monitoring and safety on Italian highway infrastructures
  • Sustainability in Fincantieri:
  • Fincantieri’s commitment again awarded by CDP and Vigeo Eiris, respectively assigning the rating of A- and placing the Group into the range “Advanced”
  • MIKE award, both in the nation and the international section of Global Companies, conferred to Fincantieri for its forward-looking approach and its stand towards upcoming sustainability and innovation challenges
  • A complete and transparent information: those the key elements leading the Group’s Sustainability Report to earn the Oscar di Bilancio 2020

Board of Directors resolutions

  • Approval of the draft financial statements of Fincantieri SpA at December 31, 2020
  • Approval of the Consolidated financial statements at December 31, 2020
  • Approval of the Consolidated Non-financial Statement at December 31, 2020 pursuant to Legislative Decree No. 254/2016 
  • Ordinary Shareholders’ Meeting convened for April 8, 2021 on single call

During the Board meeting Giuseppe Bono, Chief Executive Officer of Fincantieri, said: “Throughout 2020, the pandemic put a severe strain on the global economy, painfully impacting all industries and especially large-scale enterprises. In such a scenario, we have proven our prompt responsiveness, by rescheduling our production programs and adjusting our operational processes accordingly. Fourth quarter results show further progresses with respect to those already made in the previous quarter, as evidenced by the order intake at 4.5 billion euro, the total backlog confirmed at more than 35 billion euro with 97 vessels, and deliveries stretching up to 2029. Therefore, we should be proud of the Group’s response, as we managed to deliver 7 cruise vessels thanks to the strong relationships with our clients, and achieved prestigious successes in Naval, including the historic contract for the US Navy frigates. Moreover, in 2020 we focused even more on high-tech sectors. One for all, infrastructures: with the new Genoa bridge, we gave evidence of our ability to deliver very complex products on schedule”. Bono concluded: “As long as scientific progress is made in treatments and vaccines, we expect a growth of 25%, led by our considerable backlog, as well as improving marginality and return to profit”.

The integral version of the report (30 pages, with tables) is attached to this AVIONEWS.
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AVIONEWS - World Aeronautical Press Agency