Austal Limited (ASX: ASB) is an Australia based shipbuilding company working in the defence and commercial sector, having shipyards in the USA, Australia and the Philippines with many service centres worldwide. It is also the country’s only listed company in shipbuilding and also the largest defence exporter. It designs and constructs some of the worlds most advanced vessels and keeps a successful balance between commercial and defence projects. Austal has delivered more than 300 vessels for 54 countries globally. Some of the company’s commercial vessels include monohull, catamaran and trimaran and defence vessels include the Littoral Combat Ship, Expeditionary Fast Transport etc.
On 8th April 2019, the company announced it has successfully delivered the second Guardian Class Patrol Boat (GCPB) to the Australian Department of Defence. It presented the vessel to the Prime Minister of Tuvalu and his Government in the handover ceremony.
Under the Commonwealths Pacific Maritime Security Program, this is just the second of 21 GCPBs being gifted by the Commonwealth to 12 Pacific Island Nations and Timor-Leste.
According to the company’s CEO David Singleton, industry-leading skills of over 200 Austal employees are used in the GCPB, and other estimated 200 workers have been indirectly employed through the design, construction and sustainment process which will continue through the life of the program till 2023.
The maritime security vessel designs have continuously been developed since 1988, and the Guardian Class represents the latest evolution of these designs which has been providing maritime security for over 20 years. Thirty-two patrol boats have been delivered to the Commonwealth with further 97 delivered patrol boats and currently on order for export to international customers. The company is also doing an endorsement for patrol boat capabilities which has provided confidence to the Government of Tuvalu on the capability they will now be able to utilise.
The is the first major defence project of the company using a steel hull. It has established a new facility in Naval Base, WA, designed a production line assembly process, completed the detailed vessel design and are now delivering the second vessel less than three years after the first vessel. It clearly shows the skills, experience and management of the company.
On May 2016, the company had been awarded Pacific Patrol Boat contract, now known as Guardian Class. The combined value of the contract is A$335 million including an additional contract option given to the company in April 2018 which took the program to 21 vessels. 200 direct jobs at the company and 200 indirect jobs in the industry have been involved in this program. With a total of 1000 employees, the company is directly contributing to a strong domestic and export shipbuilding order book.
On 26th March 2019, the company announced a contract from US Navy for two additional Expeditionary Fast Transport for A$369 million.
The stock is trading slightly down by 0.22% at A$2.305 on the ASX as of 8th April 2019 (AEST 1:45 PM) compared to the previous closing of A$2.31. In the last six months, the stock has given a return of 16% whereas the YTD return is slightly better at 20.94%.
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