Italian Fincantieri to cut debt and focus on core business after first-half loss
Italian shipbuilder Fincantieri has pledged to reduce its debt in the coming months by delivering new cruise ships, after reporting a net loss of 234 million euros in the first half ($237 million).
Chief executive Pierroberto Folgiero, who took over from his longtime predecessor Giuseppe Bono earlier this year, said the company would focus on its core business to capitalize on expected growth in defense spending and a post-pandemic recovery of the cruise market.
Intesa Sanpaolo analysts said the proposed strategic review of Fincantieri’s non-core businesses, such as infrastructure construction businesses, would create expansion opportunities for the shipbuilding division.
Shares fell 6.5% late in the morning, against a broadly flat Milan all-stock index, hit by concerns about high debt levels.
The group, controlled by Italian public lender CDP, reported net financial debt of 3.3 billion euros at the end of June, compared to 2.2 billion euros at the end of last year.
“The increase in debt is primarily due to working capital dynamics in the cruise business,” the company said, adding payment extensions granted to customers due to the weighed COVID-19 pandemic.
Net debt is expected to improve slightly by the end of the year, Folgiero told analysts, pointing to the expected delivery of five cruise ships in the second half, as well as savings to offset rising commodity prices. .
The first-half loss came despite a positive operating performance in the first half of 2022, with revenue growing 16% year-over-year.