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Australian Shipbuilder and Global Defence Prime Contractor, Austal Limited (ASX:ASB) delivers iconic monohull, catamaran and trimaran commercial vessel platforms. Recently, the company was awarded a US$16.3 Mn contract by U.S. Navy with the objective of performing extended industrial post-delivery availability on the Littoral Combat Ship 20, the future USS Cincinnati.Â
Earlier in December 2018, the company was awarded US$21.1mn drydocking contract to support and sustainment of USS Manchester. As per Austalâs CEO Mr. David Singleton, the companyâs major business objective is to build a significant service and to support its businesses. These contracts will help in supporting the companyâs businesses and these will also assist in long-term expansion. The sustainment program for LCS 20 which will be performed at the Vessel Completion Yard at Austalâs manufacturing facility in Alabama, USA, is going to include drydocking services in addition to other post-delivery activities. In the post-delivery activities, the company will procure and execute work items for LCS 20âs Extended Industrial Post Delivery Availability.
Usually, the company perform these types of activities in San Diego, California, USA, however, in this case, to streamline production and support the Littoral Combat Ship program the company is performing additional work at Austalâs facility in Alabama. The company will work together with the US Navy so that the post-delivery cost could be reduced and increased the efficiency. As per the companyâs announcement, the companyâs USA Division (Austal USA) is currently increasing its naval offering. The reason behind expanding the naval offering is to include additional small surface combatants, auxiliary support ships and autonomous vehicles. The company also wants to increase its naval offering for worldwide post-delivery support and sustainment.
Currently, the Australian Securities and Investments Commission (ASIC) is investing the companyâs announcement regarding the earnings from its Littoral Combat Ship program. The company is assisting ASIC in the investigation and its fully co-operating with ASIC so that it could finish the investigation as soon as it can.
In FY 2018, the company reported FY 2018 EBITDA of $102.319 million and $65.6 million of operational cash inflow. During FY 2018, the company-maintained momentum with significant operational production and other improvements as well as progressing its strategic milestones. During the year, the company earned a revenue of $1,392.0 million which was $81.9 million higher than the previous year. In FY 2018, the company reported EBIT of $65 million which was 43 percent higher than the previous corresponding year. Further, the company reported an NPAT of $39 million which was $154 percent higher than the previous year. At the end of FY 2018, the company had net cash of $34 million which was $15 million higher than the last year. The companyâs USA business performed ahead of expectation during the year, and Shipbuilding margin increased from 6.8% in FY 2017 to 8.6% in FY 2018.
In the past six months, the share price of the company increased by 29.09 percent as on 25 January 2019. ASBâs shares traded at $2.130 with the market capitalization of circa $739.19 million as on 25 January 2019.
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