Yahoo! Finance posted the edited transcript of Fincantieri’s second quarter earnings call this morning. CEO and Director Giuseppe Bono began the call on a positive note stating that things have changed for the better since the last call.

Bono acknowledged Fincantieri’s delivery delays highlighting the fact they are seeing a delay of between 4 and 5 months. In a slight dig to competitors, he went on to call out their delays of up to 12 months.

Cruise Industry Resilient

Bono went on to say that the cruise industry is a resilient one, mentioning that some cruise lines have already resumed operations. He did not, however, make mention of the fact that some of those lines have just as quickly shut back down.

Safety First

Bono then spoke about the safety of his team and how everyone was respecting the safety measures that have been put in place. He even went as far to share that 91% of employees appreciate the safety measures implemented across the organization. CFO, Giuseppe Dado, shared later in the call that Fincantieri has on average 30,000 people in yards every day in Italy.

Looking Toward the Future

“…our current backlog allows us to be confident for our future as we’ll have a workload for the next 6, 7 years…”

Giuseppe Bono, Yahoo! Finance Transcript

While the pandemic has definitely weighed on the cruise industry and ship builders, in an effort to reassure investors, Bono shared that Fincantieri has plans and workload for the next 6-7 years. On top of that, the company is in a financial position that allows them to continue forward.

All the Rest

The call then transitioned on to several other company representatives who spoke to financials and specific numbers from the first half of the year. A couple of notables:

• Production downtime lasted from March 16-April 20. By the end of June, 90% of production staff back at work. The downtime resulted in a staggering 2.7 billion hours in production
• In the first half of the year, Fincantieri delivered 10 vessels, including 3 cruise ships; in the back half of the year, company will deliver 3 cruise ships
• Company expects to record a decrease in year-over-year revenue of approx. 16%
• The organization continues to diversify – from Naval contracts to infrastructure builds. Even expanding the “aquaculture market” of fish farming. Fincantieri has scored a U.S. Navy contract that could be worth up to $6 billion, depending on option renewals
• From 2020-2024, the number of cruise ships to be delivered remains the same. This means that the organization has been able to successfully avoid cancellations (Fincantieri CFO shared that the CEOs Carnival and NCL have both declared they have no interest in cancelling orders)

Company Outlook

“And albeit the situation is critical right now with basically no operations at this point of time, we are seeing some operators starting to resume activity…”

Giuseppe Dado, Yahoo! Finance Transcript

CFO, Giuseppe Dado reiterated Bono’s statement that the cruise business is a resilient one, highlighting some of the brands resuming sailings. He specifically called out the fact that Royal Caribbean is seeing bookings in line with 2021 historical trends. He also mentioned a survey from Cruise Critic where the majority of respondents are either looking to book or will likely book once restrictions ease.

While COVID will continue to weigh the organization down, Dado expects production to return to pre-COVID levels and revenues to be “broadly” in line with the second half of 2019.

For plans beyond this year? Dado was extremely positive:

Provided that the company’s backlog is successfully preserved, the embedded profitability in this backlog will trigger a robust rebound of the group’s results in the medium to long term

Giuseppe Dado, Yahoo! Finance Transcript

The call wrapped with questions from analysts.

You can access the entire transcript, including analyst comments from Yahoo! Finance.