Austal delivers strong revenue results with long-term programs growth

Image credit: Austal

Global shipbuilder Austal recordedrevenue of $775.0 million in the first half of fiscal year 2022, supported by strong growth in the sustainment business with revenue from the segment rising 67 per cent to $194.6 million.

Seventy-three per cent of total sales for Austal came from its USA section, while 27 per cent came from its Australasia segment. 

“Our sustainment business is growing substantially, as Austal continues to demonstrate a growing and sustainable, large-scale and geographically diverse revenue base,” said Austal CEO Patrick Gregg.

He emphasised that the successful debut of its San Diego maintenance facility earlier this month marks a significant milestone in the company’s long-term growth strategy. 

Austal’s expanding operational excellence in the Australasian sustainment business, according to the CEO, compliments its Guardian-class Patrol Boats and Evolved Cape-class Patrol Boats that were delivered, which increase Australasia earnings before interest and tax (EBIT) by over three times, to $14.4 million.

“To this end, Austal completed acceptance trials of EPF 13, the largest vessel in the United States Navy with autonomous capability, entered a strategic partnership with Saildrone to build autonomous uncrewed surface vessels, and in Australia made progress on the Patrol Boat Autonomous Trial (PBAT) for the Royal Australian Navy,” Gregg added.

Despite the increase in revenue, Austal delivered EBIT loss of$2.0 million, which was driven by the loss provision on the US Towing, Salvage and Rescue Ships (T-ATS) program. 

The CEO then noted that Austal has proactively applied T-ATS learnings to its recent, important projects, such as the Offshore Patrol Cutter (OPC) project, which has been contracted on different terms with greater cost escalation protections for the shipbuilder.

The company anticipates continued efficiencies on the remaining vessels in the Littoral Combat Ship (LCS) and EPF programs during the second half of FY2023.

Efforts will also be made to maximize the conversion of earnings from the $2.6 billion order book, which is at historically high levels for the Austal.

According to Gregg, the company still sees a sizable potential upside from a number of large shipbuilding and support possibilities as well as a robust pipeline of orders that are anticipated to materialise in the short- to medium-term that would underpin improved earnings.