Company Interview / It's full steam ahead for Austal with $13b order book

Key Points:

Austal (ASX:ASB) posts 500% increase in net profit, strong cash position and record order book Major US defence contracts include new submarine module deals supported by General Dynamics ($GD) Australian government appoints Austal as strategic shipbuilder, aiming for long-term stability and workforce retention Focus on advanced, greener commercial shipbuilding in Asia and exploring opportunities in New Zealand and allied nations

Austal (ASX:ASB) has reported a record-breaking year, with net profit after tax surging 500% to $89.7 million and revenue rising 24% to $1.82 billion. Patrick Gregg states this exceptional performance is driven by new defence programmes in both the United States and Australia, with a strong order book of $13.1 billion, plus $420 million in additional awards since June. Austal’s operating cash flow rebounded to over $406 million, ending the period with a net cash position of $453 million. The shipbuilder sees itself positioned for further growth, especially after being named Australia’s strategic shipbuilder and securing significant defence contracts.

Gregg highlights Austal’s major US contracts, including $890 million in new deals and expanded manufacturing investments, such as $350 million for new facilities in Alabama and $450 million, funded by the US Navy via General Dynamics, for submarine module manufacturing. He points to transformational developments in Australasia, with the Australian government’s support for continuous naval shipbuilding ensuring workforce stability and long-term partnerships.

Beyond core markets, Gregg outlines activities in Asia, focusing on technologically advanced, lower-emission commercial vessels produced in the Philippines and Vietnam. While Austal is not currently paying a dividend, Gregg attributes this to a $750 million investment in growth and ongoing strategic expansion.