Monday, March 28, 2011

• Order intake climbs to euro 1,912 million, despite very tough shipbuilding industry conditions, taking the order portfolio to euro 8,888 million;
• Revenues slip to euro 2,876 million reflecting less production activity;
• EBITDA is euro 179 million and EBITDA margin 6.2%;
• Profit from ordinary operations is euro 53 million but the net result for the year is a loss of euro 124 million, reflecting non-recurring and extraordinary expenses due to reduction in the order backlog, price pressure on new orders resulting from significant growth in competition, and various provisions for risks relating to non-recurring events;
• Net financial position is a positive euro 100 million, a major improvement on 2009 (negative euro 151 million).

Rome, 28 March 2011 – The Fincantieri Board of Directors met today to examine and approve the company’s proposed consolidated and separate financial statements for 2010:

  • During 2010 Fincantieri secured euro 1,912 million in new orders, which, although slightly higher than the 2009 figure of euro 1,758 million, is well below the 2008 amount of euro 2,528 million and even further below the record euro 4,238 million in 2007. This decrease is a consequence of the continued international crisis, which, since its emergence in 2009, has significantly depressed demand for new ships in all the Group’s sectors of operation.
  • Among the new orders were two 141,000 GT cruise ships for the Carnival Group’s Princess Cruise Line, two Falaj 2 stealth patrol vessels for the United Arab Emirates and two military vessels for the Italian Coast Guard. The US subsidiary Fincantieri Marine Group secured, in partnership with Lockheed Martin Corporation, an order for the first LCS (Littoral Combat Ship) as part of a contract under which the US Navy has the option to order another 10 such ships by 2015 (the overall program aims to build 55 such ships by 2020, two of which already awarded to Fincantieri Marine Group in previous years). During the year Fincantieri Marine Group also won contracts to build an oceanographic ship for the National Oceanic and Atmospheric Administration, a US federal agency, and to build 39 RB-Ms (Response Boats-Medium) for the US Coast Guard. Lastly, the repairs and conversion business received euro 44 million in orders, while euro 72 million in orders were placed for systems and components.
  • The Group’s results were affected by the economic crisis, as reflected below:

– Revenues: were 12.0% down on 2009 at euro 2,876 million; this reduction was the result of less production activity than in the prior year;

– EBITDA: came to euro 179 million, with a margin of 6.2% (versus 3.8% in 2009). This reflects positive performance by the core business as well as the positive effects of trends in the Euro/USD exchange rate;

– Result before non-recurring and extraordinary expenses: was a profit of euro 53 million, up from the prior year figure of euro 24 million, also thanks to a significant contribution from the US subsidiaries;

– Net result for the year: was a loss of euro 124 million, reporting a deterioration on the loss of euro 64 million in 2009 due to the increase in non-recurring and extraordinary expenses mentioned earlier.

  • In addition, it should be noted that:

– The international economic crisis is lasting longer than expected, with lower demand being forecast for new ships than in the past. In fact, during 2010 Fincantieri also had to face voids in its order backlog;

– In such a context it is even more important to carry on the policy already adopted by the Group of continuous efficiency improvements in company processes with the objective of reducing costs at every level, and above all of constantly improving productivity. In addition, actions must be continued to boost revenues by establishing positions in non-core business sectors and by making the business more and more international.

  • Capital expenditure of euro 58 million related to completion of projects started in the past for enhancing production efficiency and to improvements in safety and environmental standards. This amount also includes continuation of the investment program in US shipyards.
  • Lastly, of note was the positive net financial position at 31 December 2010, which reported euro 100 million.

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