Fincantieri, the listed Italian shipbuilder that is a major builder of cruise ship, had a strong first nine months of the year, but restructuring the Vard group in Norway that is now fully owned by the Italian company, resulted in costs, the company said in a statement.

The process of full integration of Vard that became fully owned  by Fincantieri Group at the end of last year and its and alignment to the best practices continued. A change in management followed, together with the launch of a reorganisation process. In particular, a review of the industrial management systems and of the economic planning of both Cruise and Offshore and Specialized Vessels projects was launched.

“Such initiatives, supported by the Italian personnel of the Group, led on the one hand to the recovery of the production delays, which would have impeded the on-time delivery of the units, and to the review, on the other hand, of the estimated costs at completion which were included within the results as of September, 30 2019, including the higher costs occurred to recover the delays on the ships in delivery. Further analysis on the industrial management systems and on the economic planning of projects are still ongoing,” Fincantieri said.

With regards to the initiatives already completed, the exit from the business of small fishery and aquaculture support vessels, which in total impacte the EBITDA of the first nine months of 2019 negatively by €19 million and the disposal of Aukra shipyard were approved.

Also, the disposal of Brevik, a second Norwegian shipyard was authorised. Moreover, the conversion of the Romanian Tulcea shipyard, which is now working at full capacity on Cruise shipbuilding is in its final stages of completion.

Giuseppe Bono, Fincantieri's Chief Executive Officer, said: “Unfortunately, the Group results are impacted by the negative contribution of VARD, which suffers from the persisting effect of the deep crisis of its reference market of the Oil & Gas, and from the costs occurred following its entrance into the cruise shipbuilding market. The reorganization of Vard is a priority for the entire Group and we dedicated to this initiative some of our best Italian employees.”

However, revenues in Shipbuilding division of the group rose tio 3.68 billion in the nine months to the end of September from €3.32 billion year on. EBITDA fell to €250 million from €270 million and EBITDA margin to 7.8% from 9.1%.