FINCANTIERI: FIRST HALF 2009 CONSOLIDATED RESULTS REMAIN POSITIVE DESPITE THE ONGOING GLOBAL CRISIS AND THE CONSEQUENT STRONG CONTRACTION IN DEMAND.

• New orders amounting to 398 Euro/million (compared to 1,425 Euro/million in the first half 2008) reflect the global financial crisis that has held back new orders for cruise ships and ferries;
• Order book at 9.8 Euro/billion is still significant but does not grant, even in the short term, the saturation of the production capacity of all Group’s shipyards, with consequent recourse to temporary staff lay-offs (i.e. Cassa Integrazione Guadagni Ordinaria);
• Operating result (EBIT) and Net Income, amounting to 23 and 9 Euro/million respectively, are impacted by the workload shortage in some shipyards of the Group and by the raw materials market trend (primarily steel and oil) which negatively impacted on the purchase prices of the last three years thus increasing the cost base of the vessels currently under construction;
• Board of Directors has resolved to execute a 300 Euro/million cash capital increase, authorised by the last Shareholders’ Meeting, in order to re-balance the financial structure, as envisaged in the Business Plan.

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Trieste, September 18th, 2009 – The Board of Directors of Fincantieri met today to review the Group’s results for the first half 2009. Despite the impact of highly unfavourable market conditions and a business environment characterized by significant changes if compared with past years, the Group confirmed a positive trend in terms of results with a Net Income of 9 Euro/million.
The results of the first half 2009 include, compared to the previous years, the consolidation of the U.S. Group Manitowoc Marine Group LLC (now Fincantieri Marine Group LLC).
• From a commercial perspective, new orders amounting to 398 Euro/million (compared to 1,425 Euro/million in the first half 2008) were acquired in a radically changed market scenario characterized by a strong decline in demand, also in the cruise sector. Moreover, the current financial crisis has highlighted the need for a closer cooperation of all stakeholders of the “national system” in order to stimulate the investments required to re-start the real economy.
• Total order book (as the sum of new orders and projects to be delivered) amounting to 9.8 Euro/billion (compared to 11.6 Euro/billion in the first half 2008) extends the expected period of utilization of the Group’s shipyards. The resulting average backlog (equal to 6.7 Euro/billion and down from 8.2 Euro/billion in the first half 2008) is still significant but, considering also the products lifecycle requirements, not sufficient to grant full utilization of the production capacity of all shipyards even in the short term. Accordingly, for the second half 2009, the Company has planned the recourse to temporary staff lay-offs (i.e. Cassa Integrazione Guadagni Ordinaria) in some production facilities that will partially experience a workload shortage. Furthermore, it should be highlighted that the current backlog is almost equally split between the merchant and naval sectors. This situation, which is new for Fincantieri, is the positive result of strategic decisions which led the company to strengthen its naval business in a global crisis situation that negatively impacted especially the merchant shipbuilding sector.
• Consolidated revenues for the first half 2009 amounted to 1,576 Euro/million, up approx. 15% from 1,372 Euro/million in the first half 2008, confirming the positive trend of the last years and also reflecting a wider scope of consolidation. EBITDA decreased from the first half 2008 (60 Euro/million compared to 75 Euro/million in the same period of 2008) as the result of (i) the lagged effects of raw materials market trend in 2006-2008, which negatively impacted the cost of procurements for vessels currently under construction and (ii) the workload shortage in some shipyards of the Group leading to an under-absorption of overhead costs. As a consequence, Adjusted Operating Result (EBIT before non recurring income and expenses) decreased to 27 Euro/million from 45 million Euro/million in the first half 2008. Due to the above mentioned results Net Income amounted to 9 Euro/million, compared to 15 Euro/million in the same period of 2008.
• The Net Financial Position was negative for 384 Euro/million (compared with a negative balance at year end 2008 equal to 64 Euro/million). This situation reflects the higher capital expenditures and the growth of the activities driven by a higher level of orders acquired in the previous years with the aim to consolidate the Group’s market position. As expected, this growth led to an increase of working capital which, together with a higher capital expenditure, generated a negative net financial position after several years of financial surplus. In light of the above, the Business Plan envisaged a share capital increase with the aim to re-balance the financial structure.
• Following the resolution of the Shareholders’ meeting held on July 17 2009, the Board of Directors resolved to execute a cash capital increase for the whole amount of 300 Euro/million in order to re-balance the financial structure and enable the Company to pursue its growth plans.
Period closed on
(Euro million) 30.06.2009 30.06.2008

Revenues 1,576 1,372

EBITDA 60 75

Adjusted operating result (*) 27 45

Operating result (EBIT) 23 40

Earnings before income tax 18 29

Net income 9 15

Orders 398 1,425

Order Portfolio 9,790 11,586

Order Backlog 6,730 8,219

Capital expenditure 50 52

(*) EBIT excluding non recurring income and expenses

(Euro million) 30.06.2009 31.12.2008

Net Invested Capital 1,216 899

Net Equity 832 835

Net Financial Position -384 -64