Fincantieri Reports 2016 Results and Strong Start to 2017

Carnival Horizon at Fincantieri

Fincantieri has already seen a strong start to 2017, after posting net income of 14 million euro on revenues of 4.4 billion euro for the year ended Dec. 31, 2016, compared to a net loss of 289 million euro on revenues of4.2 billion euro for the previous year.

In January, Fincantieri was advised that it has been selected as the preferred bidder in the sale of a 66.6 percent stake of STX France.

Also in January Fincantieri signed a contract with Carnival Corporation for two new ships for Holland America and Princess; its subsidiary Vard signed a letter of intent with an unnamed cruise company for the construction of an expedition vessel at its yards in Romania and Norway; and it delivered the Viking Sky, the third of six ships for Viking Ocean Cruises.

In February, Fincantieri signed a four-ship order for Norwegian Cruise Line, with an option for two more. Deliveries are scheduled from 2022 through 2027 if the options are exercised. The order has a potential value of $4.8 billion.

Later in the month, Fincantieri, China State Shipbuilding Corporation and Carnival signed a binding memorandum of agreement for the construction of two cruise ships with an option for four more.

In terms of firm orders, Fincantieri said in a prepared statement that it has five cruise ships scheduled for deliveries in 2017 and 2018, four in 2019 and 2020, one in 2021 and one beyond 2021.

Shipbuilding generated 3.2 billion euro in revenues during 2016; offshore 1 billion euro; equipment, systems and services, 0.5 billion euro; while a loss of 272 million euro was attributed to consolidation and other adjustments.

The Italian shipbuilding group cited a strong recovery of operating performance for its cruise ship construction with four complex prototype ships delivered on time in 2016, with simultaneous sister ships and or what it called semi-sister ships, characterized by higher margins.

Last year, Fincantieri also finalized its contracts for three ships for Virgin Voyages, signed a contract for Carnival for another Princess ship, and another ship for Regent Seven Seas Cruises.

The Vard Group signed contracts for four expedition vessels for Ponant and two for Hapag-Lloyd. Both orders involve support and supply of key components from Fincantieri.

Fincantieri and Vard also signed other orders for naval and commercial vessels during 2016 for a total order backlog of 24.0 billion euro for 99 ships at the end of 2016.

Fincantieri delivered a total of 13 vessels last year, including five cruise ships.

Moreover, last June, Fincantieri signed a labor agreement with the trade unions, which it said represents a step toward greater efficiency. The agreement is based on individual performance and overall company results. It will stay in force until Dec. 31, 2019.

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