Italy’s Fincantieri to cut debt, focus on core business after H1 loss

By Francesco Zecchini

MILAN (Reuters) -Italian shipbuilder Fincantieri on Wednesday vowed to lower its debt in the coming months by delivering new cruise ships, after reporting a first half net loss of 234 million euros ($237 million).

Chief Executive Pierroberto Folgiero, who took over earlier this year from long-serving predecessor Giuseppe Bono, said the company would focus on its core business in order to reap benefits from expected growth in defence spending and a post-pandemic recovery in the cruise market.

Intesa Sanpaolo analysts said the proposed strategic review of Fincantieri’s non-core businesses, such as infrastructure construction activities, would create scope to for the shipbuilding division to expand.

Shares fell 6.5% by late morning, against a broadly flat Milan all-share index, hit by concerns over high debt levels.

The group, controlled by Italian state lender CDP, reported net financial debt of 3.3 billion at the end of June, up from 2.2 billion euros at the end of last year.

“The debt increase is mainly due to the working capital dynamics in the cruise business,” the company said, adding payment extensions granted to customers due to the COVID-19 pandemic weighed.

Net debt is expected to improve slightly by year-end, Folgiero told analysts, pointing to the expected delivery of five cruise ships in the second half, as well as savings to offset raw material price increases.

The first half loss came despite a positive business operating performance in the first half of 2022, with a 16% growth in revenues year-on-year.

($1 = 0.9855 euros)

(Reporting by Francesco Zecchini; editing by Valentina Za and Keith Weir)