Ferretti Group has reported record-breaking profits for the first half of 2024, as the Italian shipyards achieved a net profit of €44 million, a 7.6 per cent increase compared to the same period in 2023. Notably, the growth was primarily by the shipbuilder’s superyacht segment. However, a decline in new order intake could point to a softening in demand.

“One year after the success of the double listing on the Hong Kong and Milan stock exchanges, Ferretti Group confirms its growth,” says Alberto Galassi, CEO, Ferretti Group.

“Margins reached 15.8 per cent, the best result ever for the Group’s profitability, together with a net financial position of €237 million, improved by more than €30 million compared to last spring. The second quarter of 2024 also shows signs of long-term growth, including the consistent recovery in demand from the North American market.”

Ferretti’s adjusted EBITDA reached €96.7 million in the first half of 2024, marking a 15.9 per cent increase from the previous year. This led to the record EBITDA margin of 15.8 per cent, an increase of 110 basis points (1.1 per cent) from H1 2023.

The Group’s net revenue from new build yachts also rose by 7.7 per cent to €611.0 million, up from €567.4 million in H1 2023. Europe now accounts for 51.2 per cent of Ferretti’s total new build revenue and generated €313.0 million in sales– an increase of 17.9 per cent from the previous year. The Middle East and Africa (MEA) region also saw substantial growth, with revenues rising by 27.5 per cent to €112.8 million, comprising 18.5 per cent of the Group’s total revenue.

In the Americas, revenue grew by 3.5 per cent to €161.3 million, making up 26.4 per cent of total new yacht revenue. The North American market showed signs of a strong recovery in the second quarter, with demand increasing by over 28 per cent. In contrast, the Asia-Pacific (APAC) region experienced a steep decline, with revenues plummeting by 58.4 per cent to just €23.9 million.

In terms of new orders, the superyachts segment saw the most dramatic growth, with orders surging by 84.2 per cent to €96.5 million. However, despite these revenue gains, Ferretti faced some challenges in maintaining its order intake in other areas, with orders for H1 2024 being €514.4 million, a 10.4 per cent decline compared to €573.8 million in H1 2023.

This decrease was particularly pronounced in the composite yachts segment, where orders fell by 38.5 per cent to €161.6 million. This segment, which accounted for 45.8 per cent of total order intake in H1 2023, now represents just 31.4 per cent, perhaps marking a shift in market demand. The ‘Made-to-Measure’ yachts segment, however, showed resilience, with orders increasing by 6.4 per cent to €256.3 million, accounting for 49.8 per cent of total order intake.

The shipyard’s entire order backlog as of 30 June 2024 stands at €1.5 billion, a 6.0 per cent increase from the previous year. This growth in backlog was also driven by the strong performance in the superyachts segment, which saw its entire backlog grow by 18.0 per cent to €521.9 million.

However, the net backlog (total orders not yet delivered minus revenues already booked) decreased by 5.2 per cent from March 2024 and 3.0 per cent year-on-year to €785.7 million, potentially signalling a cooling in demand. And while the financial results for H1 2024 are ultimately positive, several indicators point to potential headwinds that could challenge Ferretti moving forward.

The overall order intake decline of 10.4 per cent suggests a softening in demand, particularly in the composite yachts segment. Regional disparities in order intake are concerning too – Europe, Ferretti’s strongest market, saw a significant 39.1 per cent decline in new orders. The dramatic drop in the APAC region’s order intake (down 85.3 per cent) is also troubling, although both of these are contrasted sharply with the MEA region, however, which grew by 60.9 per cent, and the Americas, which increased by 28.1 per cent.

Ferretti is also facing rising costs in several areas, which could impact its margins. The amount the shipyard spent on raw materials and consumables increased by €17.2 million compared to H1 2023 – most likely attributable to inflationary pressures. External contractors’ costs also rose by €28.9 million.

Despite these challenges, Galassi maintains that Ferretti will continue to invest heavily in its future growth. The Group recently expanded its production capacity by acquiring additional land adjacent to its San Vitale shipyard, bringing the total production area in Ravenna to around 100,000 sqm. This expansion is expected to support increased production in the made-to-measure, composite and sail segments under the Ferretti Yachts and Wally brands.

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