PRINTFINCANTIERI: CONFIRMS A FIRST-HALF PROFIT FROM ORDINARY OPERATIONS
20 September 2011
• New orders for euro 874 million, taking order portfolio to euro 7,920 million;
• Revenues slip to euro 1,176 million reflecting lower production activity;
• EBITDA is euro 59 million;
• Profit from ordinary operations is euro 16 million before non-recurring and extraordinary expenses;
• Net financial position is a positive euro 227 million.
* * *
Rome, 20 September 2011 – The Fincantieri Board of Directors met today to examine the Group's performance in the first half of 2011:
Fincantieri won euro 874 million in new orders during the first half of the year, down from euro 1,492 million in the first half of 2010. Among the new orders was a 141,000 GT cruise ship for the Carnival Group's P&O Cruises (with an option to build a second ship), one LCS (Littoral Combat Ship) for the US Navy and two PSVs (Platform Supply Vessels) to support offshore drilling platforms and activities, ordered by Tidewater, the world's largest provider of services for the offshore energy industry.
At 30 June 2011, the Fincantieri Group’s order portfolio was worth euro 7,920 million. The associated order backlog, although a still significant euro 5,570 million, will continue to be insufficient to saturate production capacity at all the Group's shipyards.
The Group's results were affected by the economic crisis, as reflected below:
- Revenues: were 16.5% down on the first half of 2010 at euro 1,176 million; this reduction was the result of lower production activity than in the first half of the prior year;
- EBITDA: came to euro 59 million, with a margin of 5%, up from 4.3% in the first half of 2010, also thanks to measures making procurement more cost effective;
- Result before non-recurring and extraordinary expenses: reported a profit of euro 16 million, up from euro 12 million in the first half of 2010;
The net financial position was a positive euro 227 million, compared with euro 100 million at 31 December 2010. This reflects the significant reduction in working capital due to cash inflows for the ships delivered and to fewer cash outflows following the reduction in production activity.
The shipbuilding industry continued to experience severe problems in the first half of the year due to the world economic crisis. The demand for new cruise ships has settled at around 6/8 ships a year (versus an average of 12 in the pre-crisis period), of which 2/3 ships acquirable by Fincantieri.
The shipbuilding crisis has significantly intensified price pressure on new orders. This pressure has been further heightened by the highly aggressive market entry strategies recently displayed by the cruise market in the Far East.
This market situation will create a mismatch, even prospectively, between Fincantieri’s production capacity and its order backlog acquired/acquirable. In fact, during the first half of 2011 surplus production capacity resulted in the total closure of certain shipyards serving the merchant market, while others are expected to experience problems on a similar or smaller scale in the near future.
Fincantieri is addressing this situation through a block on staff turnover, with a reduction of 115 in headcount in Italy since the end of 2010, and through agreement with the unions for the temporary lay-off of up to 3,000 workers, of whom 1,772 affected as of the end of June.
Furthermore, in order to deal with increasingly fierce market competition, Fincantieri must continue, ever more resolutely, down the road of cost reduction by reorganizing and making processes more efficient and by improving productivity.
Despite the unfavourable situation described above, the swift adoption of policies to reduce worker numbers for the size of order backlog, the measures to make suppliers in particular more efficient and the lower tax burden, have resulted in an improvement in the half-year result before non-recurring and extraordinary expenses compared with the first half of the prior year. Fincantieri continues to report a highly positive net financial position, ensuring the efficient conduct of its business. Lastly, the amount of accumulated equity reserves is still considerable (euro 312 million), demonstrating the solidity of the Group's balance sheet structure.
• Revenues slip to euro 1,176 million reflecting lower production activity;
• EBITDA is euro 59 million;
• Profit from ordinary operations is euro 16 million before non-recurring and extraordinary expenses;
• Net financial position is a positive euro 227 million.
* * *
Rome, 20 September 2011 – The Fincantieri Board of Directors met today to examine the Group's performance in the first half of 2011:
Fincantieri won euro 874 million in new orders during the first half of the year, down from euro 1,492 million in the first half of 2010. Among the new orders was a 141,000 GT cruise ship for the Carnival Group's P&O Cruises (with an option to build a second ship), one LCS (Littoral Combat Ship) for the US Navy and two PSVs (Platform Supply Vessels) to support offshore drilling platforms and activities, ordered by Tidewater, the world's largest provider of services for the offshore energy industry.
At 30 June 2011, the Fincantieri Group’s order portfolio was worth euro 7,920 million. The associated order backlog, although a still significant euro 5,570 million, will continue to be insufficient to saturate production capacity at all the Group's shipyards.
The Group's results were affected by the economic crisis, as reflected below:
- Revenues: were 16.5% down on the first half of 2010 at euro 1,176 million; this reduction was the result of lower production activity than in the first half of the prior year;
- EBITDA: came to euro 59 million, with a margin of 5%, up from 4.3% in the first half of 2010, also thanks to measures making procurement more cost effective;
- Result before non-recurring and extraordinary expenses: reported a profit of euro 16 million, up from euro 12 million in the first half of 2010;
The net financial position was a positive euro 227 million, compared with euro 100 million at 31 December 2010. This reflects the significant reduction in working capital due to cash inflows for the ships delivered and to fewer cash outflows following the reduction in production activity.
The shipbuilding industry continued to experience severe problems in the first half of the year due to the world economic crisis. The demand for new cruise ships has settled at around 6/8 ships a year (versus an average of 12 in the pre-crisis period), of which 2/3 ships acquirable by Fincantieri.
The shipbuilding crisis has significantly intensified price pressure on new orders. This pressure has been further heightened by the highly aggressive market entry strategies recently displayed by the cruise market in the Far East.
This market situation will create a mismatch, even prospectively, between Fincantieri’s production capacity and its order backlog acquired/acquirable. In fact, during the first half of 2011 surplus production capacity resulted in the total closure of certain shipyards serving the merchant market, while others are expected to experience problems on a similar or smaller scale in the near future.
Fincantieri is addressing this situation through a block on staff turnover, with a reduction of 115 in headcount in Italy since the end of 2010, and through agreement with the unions for the temporary lay-off of up to 3,000 workers, of whom 1,772 affected as of the end of June.
Furthermore, in order to deal with increasingly fierce market competition, Fincantieri must continue, ever more resolutely, down the road of cost reduction by reorganizing and making processes more efficient and by improving productivity.
Despite the unfavourable situation described above, the swift adoption of policies to reduce worker numbers for the size of order backlog, the measures to make suppliers in particular more efficient and the lower tax burden, have resulted in an improvement in the half-year result before non-recurring and extraordinary expenses compared with the first half of the prior year. Fincantieri continues to report a highly positive net financial position, ensuring the efficient conduct of its business. Lastly, the amount of accumulated equity reserves is still considerable (euro 312 million), demonstrating the solidity of the Group's balance sheet structure.