Transportation Solutions - performance by business unit

(€’000)  First half
of 2013
  First half
of 2012
 Change  31.12.2012
New orders   116,226  349,913  (233,687)  642,712
Order backlog    3,216,917  3,441,645  (224,728)  3,388,258
Revenue   255,759  242,440  13,319  564,853
Operating profit    26,217  25,086  1,131  69,130
ROS   10.3%  10.3%  0.0 p.p.  12.2%
Operating working capital    (83,644)  (113,986)  30,342  (129,106)
Research and development    463  878  (415)  1,695
Headcount (no.)    671  592  79  631
(The amounts shown in the table include inter-segment transactions).
 

Revenue generated by the Transportation Solutions business unit in the six months ended 30 June 2013 amounted to €255,759 thousand, compared to €242,440 thousand for the corresponding period of the previous year.
Volumes generated in Italy accounted for 34% and those generated abroad for 66%, with 49% of volumes in the metro sector. Production mainly related to the following projects: line C of the Rome metro, high-speed railways, the Copenhagen metro, the Milan metro, the Genoa metro, Alifana, line 6 and line 1 of the Naples metro, the Brescia metro, Riyadh, Honolulu and the Australian Rio Tinto project.
The key production activities are summarised below.

ITALY

HIGH-SPEED RAILWAYS:

Interconnections continued to be rolled out and works performed under warranty on those lines already in operation in the high-speed line.With respect to the Rome-Naples section, after the arbitration between TAV and IRICAV UNO consortium was concluded in June 2012, with the award in favour of IRICAV UNO, the customer has stated its intention to appeal against the award on 7 February 2013.
Meanwhile, following the enforcement of the award obtained from the Rome Court, IRICAV UNO served a writ of execution to obtain payment of 65% of the amount set in the award, subject to a subsequent action to obtain payment of the residual amount. RFI and IRICAV UNO reached an agreement whereby RFI paid the requested amount and IRICAV UNO issued the corresponding guarantees.
In March 2012, the arbitration between RFI/TAV and the IRICAV DUE consortium was also concluded for the Verona-Padua section; under the award, RFI/TAV shall partially compensate IRICAV DUE and the 1992 agreement is still valid and in force.
RFI has already paid IRICAV DUE the amount set in the award but has not yet forwarded IRICAV DUE the definitive project for the section in order to commence the execution plan. 

ALIFANA REGIONAL LINE:

Following the halt of all activities related to the Piscinola-Aversa section, the group deemed it necessary to redetermine and agree a suspension of the physical activities so as not to incur extra costs. With reference to the Piscinola-Capodichino section, as the customer failed to fulfil its commitments, a review of the claims was commenced and there is a court order imposing the customer to pay outstanding receivables. 

NAPLES METRO LINE 6:

On 4 March 2013, part of a building collapsed in Riviera di Chiaia, near the Arco Mirelli building site. Following the event, the public prosecutor appointed consultants identified specifically to investigate the causes of the collapse. On 7 March 2013, the public prosecutor’s office served the CEO and two employees a notice of investigation through the Naples Court in respect of the offences covered by articles 434 and 449 of the Code of criminal procedure. The causes are not yet known and all relevant investigations are being carried out.
The Naples municipal authorities and the operator, Ansaldo STS S.p.A., took immediate steps to obtain authorisation to implement safety measures on the building site with a view to swiftly resuming regular activities. Activities are set to resume in September under the supervision of the judiciary experts.
Following the events described above, a delay of some months is expected in completing the station works.
Works at the other sites continued in accordance with the work schedule. No particular issues are expected with respect to the originally agreed timetable. 

ROME METRO LINE C:

The execution plan for the T3 section was formally approved in February 2013 and the area acceptance report was signed at the end of March.
With reference to the progress of on-site activities, the general contractor has just launched the pre-operational stage on the Pantano- Centocelle section, which is the first to be rolled out. This stage is set to be completed by mid-September. However, it is expected to be opened to the public at the end of 2013, pending the completion of some variations requested by the fire brigade. 

MILAN METRO LINE 5:

The Bignami-Zara line commenced operations in February.
No particular issues have arisen in relation to the activities to complete the Zara to Garibaldi section and its roll-out is slated for the end of 2013.
With reference to the line’s extension from Garibaldi (excluded) to the San Siro station, the executive design is substantially complete and orders for all main supplies have been issued. Testing of the signalling and telecommunications materials is nearing completion. Monitoring activities will take place in October 2013. Due to delays in delivery from the customer, there is presently a difference between the final date for the work compared to the contractually-agreed programme. An agreement has been reached with the Milan municipality for a situation that, although on a smaller scale (skipping some stations), will allow the partial opening of the Garibaldi to San Siro line by the contractually-agreed date of April 2015 (in time for EXPO 2015) and the completion of all works and the opening of the complete line by October 2015. 

NAPLES METRO LINE 1:

During the first half of 2013, works related to the Electrical Substation Garibaldi and the Toledo station’s second exit (Montecalvario) were almost completed. Opening to public is slated for September 2013.
Activities are also underway on the other sites that will lead to the completion of the Dante-Garibaldi section in its final configuration, except for the Municipio and Duomo stations, by the end of 2013.

BRESCIA METRO:

The metro became operational in March, after receiving all necessary safety certifications from the relevant ministerial bodies.
Monitoring and support activities and the completion of minor activities necessary to reach the performance levels established for the end of the first year of operation (which will be assessed during the technical/administrative acceptance), are underway.

REST OF EUROPE

THESSALONIKI METRO:

The General Final Design 1 documentation for the signalling subsystem and the technical variation related to the CBTC signalling system are being agreed with the customer, while the Detailed Final Design has been unveiled with respect to the other technologies.
In May 2013, the Greek government passed a law regulating the projects financed by the European Union in order to definitively settle most of the litigation arising between 2006 and mid-2012. Consequently, all the claims related to the AIASA JV in respect of the design and construction and of the Thessalonik metro, will be covered by the relevant arbitration procedure.

COPENHAGEN METRO:

The following Detailed Design milestones were reached: Passenger Vehicles, CMC, Service Vehicles and Workshop equipment. The documentation received from the customer continued to be reviewed and discussed. Preliminary Engineering and Detailed Engineering also continued.
With reference to the civil works underway at the depot, the electricity substation, offices and workshops have been completed. The structural part of the washing plant (to wash vehicles both inside and outside) has been completed, while pits and the related cable ducts are being laid down in the yard.

NORTH AFRICA AND THE MIDDLE EAST

RIYADH AUTOMATED PEOPLE MOVER SYSTEM (APM):

The system has been running automatically since September 2012; at such time, following the signing of the contract, Ansaldo STS group commenced direct operation and maintenance activities.
In addition to the activities necessary to consolidate system performance, the roll-out of the automated depot equipment (AMR: automatic meter reading, MMIS: man-machine interface systems and the washing plant) and the roll-out of the automatic operation of vehicle two are yet to be completed. The integrated system testing will be carried out during the System Demonstration in the second half of 2013.

AMERICA

HONOLULU:

Design activities continue. Specifically, the customer has approved the Definitive Design for telecommunication and security systems and is completing the process related to the other main subsystems (signalling and electrical traction).

 ASIA PACIFIC

TAIPEI METRO CIRCULAR LINE:

The new contractual programme based on an extension of time of 19.5 months was approved in April 2013. Detailed Design activities are underway in accordance with the new programme and manufacturing activities are slated to commence in the next few months.

AUSTRALIA:

Production of the first half of 2013 related to projects under the master agreement with Rio Tinto (RAFA). The key production activities of the reporting period related to AutoHaul, RCE283, Hope Down 4, Driver Assist and ECP (Electronically Controlled Pneumatic brakes).

Operating profit (EBIT) of the Transportation Solutions business unit for the period ended 30 June 2013 came to €26,217 thousand (10.3% as a percentage of revenue), compared to €25,086 thousand (10.3% as a percentage of revenue) in the corresponding period of the previous year.
This increase is due to the increased volume and the different mix of contracts in the two periods.
Operating working capital at 30 June 2013 was negative by €83,644 thousand, compared to a negative €129,106 thousand at 31 December 2012. The change is mainly due to the increase in net work in progress.
Research and development expense taken to profit or loss totalled €463 thousand, compared to €878 thousand in the corresponding period of the previous year.
The headcount at 30 June 2013 numbered 671, up 79 employees on the 592 employees at 30 June 2012. This rise is mainly linked to the increase in activities on projects in Australia.

Registered Office: 16151 Genoa Via Paolo Mantovani, 3 - 5
Paid-in Share Capital EUR 70,000,000 R.E.A. n. 421689 Register of Enterprises of Genoa Tax Code 01371160662
A Finmeccanica Company