Holding orders exceeding 300 billion! Another shipbuilding giant is making a strong recovery

Thanks to the significant recovery of the cruise market, Fincantieri Group, the world's largest cruise ship builder, has seen its order intake more than double in the first three quarters of this year compared to the same period last year, with a backlog exceeding 300 billion yuan.

On November 14, Fincantieri released its financial report for the first three quarters of 2024. In the first three quarters of this year, Fincantieri's revenue increased by 3.7% year-on-year to €5.583 billion (approximately 42.583 billion yuan), and revenue growth is expected to further accelerate in the fourth quarter, enabling the group to raise its 2024 performance expectations, with full-year revenue expected to exceed €8 billion.

Fincantieri's profitability increased significantly in the first three quarters, with earnings before interest, taxes, depreciation, and amortization (EBITDA) reaching €328 million (approximately 2.502 billion yuan), a year-on-year increase of 19%. The EBITDA margin was 5.9%, a significant improvement compared to 5.1% as of September 30, 2023, and 5.2% at the end of 2023, with improved margins across all business units.

Financial report data shows that in the first three quarters of this year, Fincantieri's shipbuilding revenue was €4.124 billion, a decrease of 5.3% compared to €4.354 billion in the same period of 2023. Among them, cruise ship business revenue decreased from €2.89 billion in the same period last year to €27.58 million, accounting for 45% of the group's total revenue (49% in the same period of 2023); warship business revenue decreased from €1.421 billion to €1.328 billion, accounting for 22% of the group's revenue (24% in the same period of 2023).

In the first three quarters, Fincantieri's shipbuilding business EBITDA was €257 million, with the EBITDA margin increasing from 5.9% in the same period last year to 6.2%, thanks to the impact of operational efficiency plans and consistent with the expected year-end trend.

Meanwhile, in the first three quarters, Fincantieri's offshore and specialized vessels business revenue reached €917 million, a significant increase of 29.2% compared to €710 million in the same period last year; EBITDA increased from €31 million in the same period last year to €45 million, an increase of 47.1%; and the EBITDA margin increased from 4.3% in the same period last year to 4.9%.

Fincantieri pointed out that the company's new order intake surged in the first three quarters of this year, with the total value of new orders reaching €8.504 billion (approximately 64.862 billion yuan), exceeding the €6.6 billion level for the whole of 2023 and more than double the €4.04 billion in the same period of 2023. In particular, in the shipbuilding business covering cruise ships and warships, new orders in the first three quarters reached €6.997 billion, 2.5 times that of the same period last year.

In July, Fincantieri signed an agreement with Carnival Corporation to build three 230,000-ton LNG dual-fuel luxury cruise ships for Carnival Cruise Line brands. These are the largest cruise ships Fincantieri has ever built and will be delivered before 2033.

In addition, in the first three quarters of 2024, Fincantieri's Norwegian subsidiary VARD also undertook the design and construction contracts for 7 wind farm commissioning service operation vessels (CSOVs), 2 ocean energy engineering vessels (OECVs: Ocean Energy Construction Vessels), 1 energy engineering vessel, and 1 fishing vessel in the offshore and specialized vessel sector, further consolidating VARD's leading position in this construction market, with a total order value of €1.139 billion, a year-on-year increase of 28.5%.

As of September 30, 2024, Fincantieri's order backlog totaled €40.1 billion (approximately 305.851 billion yuan), approximately 5.2 times its 2023 revenue. Among them, 95 vessels worth €26.4 billion are confirmed orders, and there are also €13.7 billion in optional orders, with delivery dates extending to 2032.

Fincantieri stated that the cruise industry continues to maintain strong growth momentum this year. It is predicted that the number of global cruise passengers will exceed 39 million by 2027, with a compound annual growth rate of 5.4% before 2030. This trend, along with the application of innovative "green" technologies, has accelerated the renewal of the cruise fleet. In the growing new cruise ship construction market, Fincantieri maintains a leading position, with a market share exceeding 40%.

In the offshore market, industries related to renewable energy, especially the offshore wind power industry, continue to maintain a steady growth trend. The demand for specialized vessels such as CSOVs and SOVs (service operation vessels) is strong, and in this area, Fincantieri, through its Norwegian subsidiary VARD, occupies approximately one-third of the global market share.

Looking ahead, Fincantieri will continue to advance its 2023-2027 business plan. Based on the improvement in performance in the first three quarters, Fincantieri has raised its full-year 2024 performance expectations, expecting the group's revenue to increase to over €8 billion this year and the EBITDA margin to reach around 6% by the end of the year.