Here’s how and why Fincantieri is crazy about the military
How much does the military ship business weigh on Fincantieri's accounts and how the group moves in the sector
Stern wind for Fincantieri with military ships.
The Trieste shipbuilding group closed 2020 with revenues of € 5.191 million, down 11%, weighed down by the Covid-19 pandemic.
If the 2020 financial statements closed with a loss of 245 million euros, but the CEO Giuseppe Bono was confident: "The results of the fourth quarter consolidate the improvement already recorded in the previous one, as evidenced by the acquisition of new orders for 4, 5 billion euros, from the confirmation of the total workload that exceeds 35 billion and from 97 ships with deliveries up to 2029. We can therefore be very satisfied with the reaction of the Group, which thanks to solid relationships with customers was able to deliver 7 ships cruise ship and has achieved very important successes in the military, starting with the historic order for the US Navy frigates ”.
As summarized by Il Sole 24 Ore, “the business of military ships has made the lion's share”.
In the note released , Fincantieri in fact underlined the consolidation in the military sector at national and international level. From the new units destined for the Italian Navy, two new Fremm and two U212 NFS submarines, to the order for Fincantieri Marinette Marine in the FFG (X) program for the US Navy. The contract provides for the construction of the class leader unit and the options for an additional 9 units which, if exercised, will bring the value of the contract to 5.5 billion dollars and visibility until 2035.
On the European front, Fincantieri highlighted the operations of Naviris, an equal joint venture with the Naval Group, which continues to develop the first orders received.
All the details.
REVENUES FROM THE SHIPBUILDING SECTOR
Revenues from the Shipbuilding sector at 31 December 2020 amounted to € 5,226 million and, excluding revenues from pass-through activities of approximately € 690 million, amounted to € 4,538 million, a decrease of 11.8% compared to December 31, 2019. This trend is conditioned by the postponement of production programs, following the shutdown of the Group's Italian shipyards, which led to the non-recognition of revenues in the year for € 909 million.
Revenues for the period refer for Euro 3,281 million to the cruise ship business area (Euro 3,631 million at December 31, 2019), with a decrease of 9.6%, and also discount the negative effect of the change in the Euro exchange rate. / Norwegian krone (approximately € 41 million), generated by the conversion of the financial statements of the Norwegian subsidiaries.
Revenues from the military ships business area, excluding pass-through activities, amounted to € 1,250 million (€ 1,503 million at December 31, 2019), a decrease of 16.8%, and also reflect the negative effect of the change of the Euro / USD exchange rate on the translation of the financial statements of the US subsidiaries (approximately € 10 million).
DELIVERIES IN THE SHIPBUILDING SECTOR, PUSH MILITARY VESSELS
In the military ships business area, the volume of activity is guaranteed by the development of existing programs, Fincantieri underlined. In particular, 5 ships are expected to be delivered by Italian shipyards, as well as 3 units to be delivered to US FMM shipyards. 2021 will see the start of activities for the FFG (X) program for the US Navy, which will be accompanied by a significant investment program to upgrade US shipyards.
THE COLPACCIO IN THE UNITED STATES FOR FINCANTIERI MARINETTE MARINE
With reference to the military ships business area, Fincantieri recalls the contract for the first class leader unit of the new missile launching frigates for the US Navy as part of the FFG (X) program. The contract also includes options for the construction of the next 9 units, with deliveries expected until 2035.
The award represents an important evolution in the strategic profile of American operations, underlines the Trieste Group. "For the first time, in fact, the American subsidiary, Fincantieri Marinette Marine will play the role of prime contractor in a contract for the US Navy."
THE CONTRACT FOR THE LUSV
In addition, the Department of Defense and the US Navy have awarded the subsidiary Fincantieri Marinette Marine a contract to develop the design and engineering of the Large Unmanned Surface Vessel (LUSV), the future large surface vessels capable of operating unmanned on board. .
THE SALE OF THE TWO FREMMS IN EGYPT
During the fourth quarter, the contract for the sale of two Fremm units was also finalized, one of which delivered in December 2020 and the other for delivery in 2021.
The note from Fincantieri does not specify that the acquirer is Egypt. ( Here the in-depth analysis by Start on the first Fremm frigate delivered to Egypt ).
The sale, carried out by Fincantieri, provides for the transfer of two units of the Fremm program that Orizzonti Sistemi Navali SpA (joint venture with Leonardo) acquired as prime contractor for the Italian Navy as part of the agreements with Occar (Joint Organization for Cooperation in the field of armaments).
WORK STARTED FOR THE TWO NEW FREMM FOR THE NAVY
In the context of the operation, Orizzonti Sistemi Navali SpA has ordered two platforms for the construction of two new Fremm units to be assigned to the Italian Navy as part of the aforementioned program.
And the works have already started this week. “The sheet metal of the first of the 2 new FREMMs destined to replace the 2 units sold to Egypt (Emilio Bianchi and Spartaco Schergat) within the Navy fleet was cut. The 2 new Fremms will be in GP (General Prupose) configuration like the ships they will replace. Fincantieri sees its Fremm portfolio grow to 12 units (to which 10 FFGX for the US Navy must be added), ”said Rid .
"Both of these units will be delivered by 2025, without further additional costs," said AnalysisDifesa .
THE CONTRACT FOR SUBMARINE U212 NFS
Furthermore, on February 26, Fincantieri signed a contract for the order of two U212 NFS (Near Future Submarine) submarines with Occar, destined for the Italian Navy fleet.
The total value of the order is 2.3 billion. The first tranche will have a value of 1.35 billion and will concern the construction of the first two submarines.
The order also includes the provision of training, technical and logistical services, as well as the option for two subsequent units of the same class.
TIRA STRAIGHT NAVIRIS (JV FINCANTIERI AND NAVAL GROUP)
Finally, again in the military field, Naviris, a 50/50 joint venture of Fincantieri and Naval Group, of which Giuseppe Bono is president, is fully operational.
Naviris has signed with Occar, the first R&T (research and technology) contract for a program of 5 research projects, which will be the basis of the long-term cooperation between the two Groups.
Naviris, prime contractor, will coordinate the technical activities entrusted to the two companies and will have the intellectual property of all the results of the research developed.
At the beginning of February, the joint venture officially received Iso 9001: 2015 and Aqap 2110 certifications from Lloyd's Register, in accordance with the provisions of the supplementary NATO regulation for the main defense suppliers.
In mid-February Naviris entered into a partnership with Spain's Navantia for the European Patrol Corvette (Epc) program. The EPC will likely be the first ship designed by the fledgling joint venture.
SALE FRIGATE FREMM TO GREECE IN SIGHT?
But the good news for the Trieste shipbuilding group's military business does not stop there.
Last weekend, Fincantieri saw the opportunity to sell Fremm frigates to the Greek Navy which intends to renew its fleet.
In fact, according to Kathimerini , Athens is evaluating a proposal from Fincantieri and Leonardo for the supply of four Fremm multi-mission frigates. These units constitute "the backbone of the Italian Navy" which has 8 units destined to become 10 when the program is completed, points out the Greek daily.
ITALY WITH FINCANTIERI CHALLENGES FRANCE
"Pending confirmation and clarification, the news lends itself to various evaluations" commented Gianandrea Gaiani, director of SviluppoDifesa . “First of all, the interest in Fincantieri's frigates risks removing from France the European monopoly of new military supplies to Greece, also favored by the clear stance of Paris alongside Athens and against Turkish expansionism in the Mediterranean”.
“A possible affirmation of Fincantieri's ships in Greece would constitute a new success for the Italian naval shipbuilding industry at the expense of the French one after the mega-contract for the Qatar fleet and the supply of two Fremm to Egypt” pointed out Gaiani.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/ecco-come-e-perche-fincantieri-stramba-sul-militare/ on Mon, 01 Mar 2021 07:59:52 +0000.