Austal Limited (ASX: ASB), the Australian vessel builder company designs, constructs and delivers commercial and defence vessels. It deems to be the world’s largest aluminium shipbuilder. Austal Limited presented its updates since H1 in the Macquarie Securities Australia Conference today, 30 April 2019. The highlights of the presentation are discussed under:
- The full year guidance for revenue now ranges between $1.8bn to $1.9bn.
- 2 EPF vessels worth A$369m have been accorded since the half year. Out of the total 14 orders, 10 EPF orders have been delivered.
- Mols 109m ferry and 2 Braveline 50m ferries were delivered on time.
- One further guardian class patrol boat was delivered on time program stable resulting in 2 of the 21 being delivered. The deliveries and quality of Guardian class patrol boat are smooth and profitable.
Moreover, Austal has won all of the three competitions for LCS over the last 2 years depicting its strength in cost competitiveness. The diversity and quality of commercial customers across Japan, Taiwan, Korea and Europe are paving a path to strengthen business, given these countries own their personal and strong shipbuilding industries. Regular and efficient innovation has kept Austal ahead as a technical first including the trimaran hull which has the best combination of the benefits of the carrying capacity and efficiency of catamarans along seakeeping of monohulls. Generous R&D investments had fetched clients in Denmark, Norway and Trinidad, the Trimarans for Spain (Canary Islands) and Japan. The smaller vessels are focussed on tapping the Asian markets. Along with this, Austal is aiming to improve its fuel efficiency, ride and reliability while working on new low emission fuels, inclusive of LNG and battery-powered vessels.
Auxillary Transport vessels are amongst the distinctive Austal products and were originally based on commercial catamaran design. Navies around the world demand speed, efficiency and carrying capacity in vessels. The company in its presentation stated that this vessel has been consistent in achieving 99% availability for US Military Sealift Command. As a result of this success, the US Navy has ordered 10 JHSV and added 4 more EPF vessels, which are under construction in the company’s Alabama shipyard.
Austal Limited has been committed towards building high quality and low-cost manufacturing centres to service their key markets in the USA, Australia, Europe and Asia while the technological lead base stays in Western Australia. In the US, this year Austal completed 20 years of ship building, making it the largest and most efficient aluminium shipyard in the USA which the company believes is a crucial competitive advantage.
Furthermore, even though the contract is not sealed yet, Austal has received a schedule protection funding from Trinidad and Tobago for 2 Cape vessels set to be delivered in mid-2020.
Moving towards the Asian markets, the continent is believed to have full potential to optimistically change the business for Austal positively. The company is providing 2 large vessels at a time when there were none delivered before.
The US Navy Future Frigate concept program, on the other hand, depicts a major growth opportunity for Austal in the USA with a bigger and much-sophisticated ship that, according to the Navy, could be around US$800m each with a requirement for 2 per annum.
Share Price Information:
The ASB shares closed the day’s trade at A$2.665 (As of 30 April 2019), and were up by 3.295% as compared to its previous price.