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Austal posts strong profit gains

Australian naval shipbuilder Austal has posted a decline in revenues but gains in earnings and profits during the first half of fiscal year 2021-22, the company announced on 26 February.

Austal said its revenues in the six months to 31 December were AUD840.3 million (USD660 million), a decrease of 19% compared to the corresponding period last year.

Despite the decline, Austal said its earnings before interest and taxes (EBIT) increased by nearly 18% to AUD70.5 million and that net profit after tax surged by nearly 29% to AUD52.4 million.

Austal CEO Paddy Gregg said: “The strong interim financial results were driven by excellent shipbuilding operating margins in both of our USA and Australasia operations, which flowed through to an enhanced bottom line.”

Gregg said the positive earnings was also supported by Austal’s initiatives to enhance efficiencies, reduce costs, and focus businesses on achieving sustained profitability.

Gregg attributed the decline in revenues to US/Australian dollar exchange rates, lower production rates in the US, a reduction in Australasia commercial shipbuilding volume, and some delays attributed to Covid-19.

Looking forward, the company was optimistic and pointed to “numerous USA steel shipbuilding and maintenance-support tender opportunities” and a “growing pipeline of new defence vessel contracts across the USA and Australasia”.

About 76% of Austal’s sales are sourced from the US and through two major projects under way for the US Navy: the Littoral Combat Ship (LCS) and Expeditionary Fast Transport (EPF) programmes.

In Australasia, Austal is building at its Western Australia headquarters Guardian-class patrol boats for Pacific Island states under contracts awarded by the Australian government.

In May 2020 Austal was also awarded a AUD324 million contract to design and construct six Cape-class patrol boats for the Royal Australian Navy (RAN).

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