All the problems of Naval Group, not only in Australia
After the cancellation of the contract for 12 submarines by Australia, the problems are not over for Naval Group
Ko for the French shipbuilding giant Naval Group.
The French industrial group is in dire straits after losing the AU $ 50 billion contract with Australia for the supply of 12 submarines. Naval Group may be forced to review its headcount and industrial capabilities. The French newspaper La Tribune writes it.
Now, as reported by the newspaper Les Echos , negotiations are opening for compensation, which, however, will not be able to compensate for the losses suffered.
Risks relate to long-term assets due to declining orders. Naval Group has had problems in many countries, where it was unable to obtain the expected orders.
Furthermore, according to sources of the two French newspapers, it seems that in Saudi Arabia Naval Group has been overtaken by Fincantieri, Navantia and South Korean companies. Not only that, Fincantieri would have overtaken the competitor also in Morocco, where it would be in negotiations for the sale. of two frigates Fremm.
In the meantime, with regard to the Australian contract, Banca Akros does not expect any impact on Fincantieri, reports MF / Milano Finanza, which “as far as we know is not involved in either the old or the new contract”.
Thales also confirms its financial objectives despite Australia having broken the contract with Naval Group, of which Thales is a 35% shareholder, reports Radiocor .
All the details.
THE MAXI-CONTRACT WITH AUSTRALIA IN SMOKE
“Naval Group, which has been going through a bad commercial period for months, with the termination of the Australian contract, will certainly have to reduce its workforce and downsize its industrial facilities”.
The French newspaper La Tribune writes, explaining that the group hoped for an agreement with Canberra to fill its gaps in the export sector.
Instead, the Australian government will work with the US and UK to switch to a US-made nuclear submarine.
On September 15, President Joe Biden announced a new US security alliance (Aukus) with Australia and Britain that will help equip Australia with a nuclear submarine fleet.
THE POSITION OF THE FRENCH SHIPYARD GROUP
Naval Group, for its part, was satisfied with a concise official statement, to express "a great disappointment". The spokesperson for the group, however, stated that “the analysis of the consequences of this Australian sovereign decision will be conducted with the Commonwealth of Australia in the coming days.
AND THAT OF THE GOVERNMENT OF PARIS
"France will seek to ensure that any financial backlash [from the cancellation of the Australian contract] to Naval Group is limited," French Defense Minister Florence Parly said.
Parly did not rule out France seeking compensation from Australia.
THE PROBLEMS OF NAVAL GROUP
But for Naval Group there is not only the Australian question. The group had problems in many countries, where it was unable to obtain the expected orders. According to La Tribune, Naval Group, like other companies, fails to anticipate the competition in those countries considered strategic for Paris. A situation also linked to the fact that the State is too present within it.
Now, as reported by the newspaper Les Echos , negotiations are opening for compensation to the Naval Group, which, however, will not be able to compensate for the losses suffered. Risks relate to long-term assets due to declining orders.
THE IMPACT ON THALES
"If in the short term Naval Group risks nothing or almost nothing, in the medium and long term the group (with its 15,800 employees) will be in very serious difficulty due to a drop in its industrial load due to the lack of export contracts" underlines La Tribune .
This also poses major problems for the entire French naval naval industry, including its shareholder Thales, which benefits from the programs obtained by Naval Group.
However, Thales today confirmed the medium-term objectives of annual growth of its Defense and Security sector from 4 to 6%.
According to the vanish Australian contract, Thales was "a supplier of certain subsystems to Lockheed Martin" and the share due was estimated at one third of the contract value. "As of June 30, 2021, the backlog contracts with Lockheed Martin were not relevant at the Thales scale, as they represented an amount of less than 30 million euros, or less than 0.1% of the total order book at the same date (34.6 billions of euros) ”, explains Thales. The French group therefore confirms its forecasts for 2021 of a turnover "between 15.8 and 16.3 billion euros", an operating margin "between 9.8% and 10.3%", reports Radiocor .
POLAND HAS CHOSEN NAVANTIA AND TMS
As we said, Naval Group is having export problems elsewhere as well.
First of all in Poland, where the Defense has pre-selected the Spanish Navantia and the German ThyssenKrupp Marine Systems for the design of three frigates.
BAD SHOT ALSO IN ROMANIA
Also in Romania the air is not good for the French group. The government could retrace its steps by withdrawing from a € 1.2 billion contract for four Gowind corvettes, won by Naval Group together with Romania's Constanța Shipyard in July 2019.
OVERCOMED BY FINCANTIERI IN SAUDI ARABIA
Furthermore, according to various sources cited by La Tribune and Les Echos, it seems that in Saudi Arabia Naval Group has been overtaken by Fincantieri, Navantia and companies from South Korea.
And Morocco would also be negotiating with the Italian Fincantieri.
As Rid pointed out at the beginning of July, “Morocco, which, let us remember, has a French Fremm in service, would like to purchase 2 more units, but this time in an Italian (antisom) configuration. The interest is concrete and discussions with Fincantieri are underway ”.
WHO WILL CHOOSE THE ELLENICA MARINA?
Finally, there is still the race for the Hellenic Navy.
Naval Group is also competing for the Hellenic Future Frigate program initiated by the Hellenic Navy for the purchase of 4-12 frigates, a contract that is potentially worth 2-6 billion euros and which should be awarded by the end of this month.
According to a Greek newspaper, Italy recently reformulated its proposal to win the tender for Greece's new frigates. Our country would be ready to immediately sell two Fremm of the Italian Navy in order to win the race in Greece with Fincantieri.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/tutti-i-problemi-di-naval-group-non-solo-australiani/ on Fri, 17 Sep 2021 13:21:42 +0000.