Record profit for Austal

Austa has exceeded $2 billion of revenue for the first time and delivered record earnings for FY2020.

Austal Chief Executive Officer David Singleton said: “I’m delighted that Austal has generated a record full-year result amidst significant global economic volatility, exceeding the record revenue and profit milestones that we set in FY2019. I am particularly proud of the fact that we kept all of our sites open during the pandemic, kept all of our people employed, and have been in a position to pay full time employees a bonus to reflect their exemplary performance in this difficult time.

“The strong performance shows good operational momentum across all of our USA and Australasia operations as we constructed and delivered naval vessels and large ferries, and provided ongoing support services to the US Navy, RAN and the ABF.”

"The financial results highlight the success of our ongoing strategy to grow our defence business, which now makes up approximately 88 per cent of the Group’s revenue across construction and support," Austal Chief Operating Officer and CEO-designate Patrick Gregg said. "The value of this is clear as we see that the broader Defence Market is strengthening and has largely been shielded from the economic impacts of COVID-19.

“Importantly, these record earnings have translated into significant cash flow, enhancing our strong balance sheet position with $397 million of cash. This financial strength is enabling Austal to target strategic investment opportunities to drive the company’s next phase of growth whilst at the same time increasing dividends and considering debt reductions in FY2021.

“These opportunities include the development of a modern steel shipbuilding capability at our shipyard in Mobile, Alabama, which has already begun. This investment in steel shipbuilding will supplement our existing aluminium capability and allow Austal USA to compete for a number of new, major steel shipbuilding programs in Austal’s size range, that are expected to be tendered in the medium term.”

“There are also defence opportunities closer to home. The Commonwealth of Australia has demonstrated a commitment to defence with the $324 million contract for six Cape Class Patrol Boats awarded to Austal this year, adding to the 21-vessel Guardian Class Patrol Boat program.

"The recent Defence White Paper and Force Structure Plan identified more heavy steel ships to be built in Australia. In Asia, our shipbuilding facility in the Philippines also has the potential to open up defence opportunities, building on our investments in the region.”

Mr Singleton said the support business was making a growing contribution to Austal’s earnings.

“Austal’s strategic expansion of our support business has continued, achieving year over year revenue growth of 28 per cent and almost quadrupling over the last 6 years."