Austal announces 154% profit growth in 2018

Launch of USS Omaha (LCS 12) at Austal's shipyard in Mobile, Alabama. Picture credit: Austal

Australian shipbuilder, Austal, has announced a 154 per cent increase in its net profit after tax in the 2018 financial year (ended 30 June 2018) – driven by excellent performance in its US Navy shipbuilding programs.

The company’s USA segment reported $1.16 billion in revenue, and 9.1 per cent growth in earnings before interest and  taxes (EBIT) over FY2017, while the Australian segment of the company reported revenue of $198.5 million.

Austal’s US shipyard in Mobile, Alabama, achieved further efficiencies in the construction of two US Navy programs, the Littoral Combat Ship (LCS) and Expeditionary Fast Transport (EPF).

Austal secured more than $420 million in commercial ferry contracts during FY2018, underpinning a major capacity expansion currently underway at the company’s shipbuilding facilities in Asia and Western Australia. Austal also secured new defence vessel orders, which has led to an end of year order book of $3 billion.

Austal Chief Executive Officer David Singleton said the performance of Austal USA and award of $420 million in commercial ferry contracts were major highlights in the year.

Austal CEO David Singleton said the performance of Austal USA and award of $420 million in commercial ferry contracts were major highlights in the year.

“Austal USA delivered standout performance in the 2018 financial year, with even greater efficiencies achieved on our two major shipbuilding programs for the US Navy,” Singleton said.

Throughput at Austal’s Henderson shipyard increased significantly during the year, delivering revenue growth as Austal completed construction and design work on the Guardian Class Patrol Boat (GCPB) program for Pacific Island nations, and large commercial ferries, as well as sustainment work on the Cape Class Patrol Boat (CCPB) support contract and Armidale Class remediation contract.

The PPB-R program will see 21 Austal designed and built patrol boats gifted by the Commonwealth to the Pacific Island Nations.

“In its 30th year, Austal has delivered near-record profit, strong operating cash flow, and as a result is able to increase dividends to shareholders,” Singleton said.

“Importantly, we also continued to fill our order book through the award of an additional LCS vessel and the major expansion in our commercial ferry order book to more than $440 million.”

Austal expects FY2019 group revenue of $1.3 – $1.4 billion. In addition, Austal expects its Australia and Asia segments to deliver positive earnings in FY2019 as the company delivers on its patrol boat contracts and substantial commercial ferry order book.