Loss-making Italian shipbuilder Fincantieri must reach a 3% net profit margin "to make economic and industrial sense," its chief executive said on Wednesday, without setting a date for the goal.
"That's where we want to be when our work is done," Pierroberto Folgiero told reporters following a meeting with investors in Milan after taking on the role a year ago. "To 'future-proof' Fincantieri ... we need a green and digitalized business model ... and a 3% margin for the bottom line," he added.
Updating its business plan to 2027, Fincantieri on Wednesday confirmed it would return to net profit in 2025, setting targets also for this year and 2024.
The shipbuilder posted a net loss of 324 million euros ($357 million) in 2022 after non-recurring items of 238 million euros related to the impact of the pandemic and the war in Ukraine, which forced management to carry out a strategic review of all its major contracts. Fincantieri said it expected cruise order intake from 2023-2024 as passenger numbers rise on average by 6% a year up to 2030.
Under the updated plan, Fincantieri sees revenues at 7.6 billion euros this year and 8 billion in 2024, with a confirmed target of 9.8 billion for 2027. In 2022 it posted revenues of 7.44 billion euros.
The company sees a gradual rise in its margin on earnings before interest, tax, depreciation and amortization (EBITDA) to around 5% in 2023 from 3% last year and to a confirmed 8% in 2027. Fincantieri plans capital spending of around 980 million euros until 2027.
($1 = 0.9084 euros)
(Reuters - Reporting by Gianluca Semeraro and Valentina Za - Editing by Mark Potter)