Austal recently released its financial results for the financial year ended December 31, 2024 (H1 FY2025).
The company recorded earnings before Interest and tax (EBIT) of AU$42.7 million (US$27.2 million) (H1 FY2024: AU$32.1 million; US$20.5 million), on revenue of AU$825.7 million (US$526.7 million) (H1 FY2024: AU$717.7 million; US$457.8 million).
Austal said EBIT was significantly higher than both the first half and second half results in FY2024, and was ahead of expectations. The growth in earnings reflected an increase in revenue in USA shipbuilding and a recovery in Australasian shipbuilding operations.
The award of two infrastructure contracts totalling approximately US$600 million significantly strengthened the closing net cash position to AU$212.6 million (US$135.6 million), and supports the company's planned capex program to increase manufacturing capacity and drive continued growth.
The first was a US$450 million contract awarded by General Dynamics Electric Boat to fund Austal USA to enhance existing infrastructure by designing, constructing and outfitting a new module fabrication and outfitting facility at Austal’s Mobile shipyard (MMF3).
The second was a US$150 million contract from the US Navy to invest in enhancing ancillary infrastructure and facilities adjacent to Austal USA’s facilities and around the Mobile area.
Both contracts aim to support the US Navy goal of delivering one Columbia-class and two Virginia-class submarines annually.
"We continued to grow the order book with new defence and commercial contract awards, improve operating margins, and significantly increased our net cash position," said Paddy Gregg, Austal CEO. "Austal now has record work in hand, and a strengthening balance sheet to support investment in manufacturing capacity and drive continued growth over the next decade.
"The outlook for the second half is very positive with potential for the order book to grow further if the Australian government contracts programs through the Strategic Shipbuilding Agreement, and we continue to see operational improvements on our US build programs and through the increased volume of commercial work in Asia. We now expect FY2025 EBIT to be not less than the AU$80 million (US$51 million) we guided at the AGM [annual general meeting]."
Austal delivered H1 FY2025 revenue of AU$825.7 million, up 15.1 per cent on H1 FY2024, primarily due to stronger shipbuilding revenue with both USA and Australasian operations contributing strongly.
USA activity was driven by the Tactical Auxiliary General Ocean Surveillance vessel (T-AGOS) and Offshore Patrol Cutter (OPC) completing design phases, which offset reduced revenue from the littoral combat ship (LCS) program nearing completion.
Australasia shipbuilding revenue recovered strongly from increased throughput from new commercial contracts secured during the period.
The support business maintained steady revenue contribution year-on-year at around AU$194.9 million (US$124.3 million) (down one per cent), with stronger revenue in Australasia largely offsetting lower revenue in USA. Shipbuilding share of total revenue increased to around 76 per cent of total revenue, with support at around 24 per cent (FY2024: shipbuilding ~68 per cent, support ~32 per cent).
Earnings Before Interest and Tax (EBIT) increased by AU$10.6 million (US$6.76 million) (+33 per cent) to AU$42.7 million (H1 FY2024: AU$32.1 million) for the reasons outlined above. The H1 FY2025 group EBIT margin improved to 5.2 per cent from 4.5 per cent in H1 FY2024 and 3.8 per cent in FY2024.
Net profit after tax increased by AU$13.1 million (US$8.36 million) to AU$25.1 million (US$16 million) (H1 FY2024: AU$12 million; FY2024 AU$14.9 million).