Austal has more than doubled full-year profit to $39 million, driven by the strong performance of its US Navy shipbuilding programs.
The world’s largest aluminium shipbuilder says net profit for the 12 months to June 30 rose from $15.4 million a year earlier, boosted by above-guidance 9.1 per cent earnings growth in the US.
Chief executive David Singleton said the performance of Austal USA and award of $420 million in commercial ferry contracts were major highlights for the year.
‘Austal USA delivered standout performance in the 2018 financial year, with even greater efficiencies achieved on our two major shipbuilding programs for the US Navy,’ he said.
Austal, which has 10 ships on order across two major defence vessel contracts for the US Navy, said margins for its largest business unit, the US defence shipyard, rose ahead of forecast to 8.5 per cent.
Australian earnings, however, fell further, resulting in a $6.7 million loss, after costs associated with a protracted bidding war with German firm Lurssen on the offshore patrol vessels project.
Also contributing to the loss was the low margin of the Mols ferry, which was originally intended to be built in the Philippines but for operational reasons was transferred to Australia.
Despite this, Austal’s Australian revenue jumped by 74.6 per cent to $198.5 million, up from $113.7 million last year, while FY19 earnings are expected to improve as construction programs on contracted vessels mature.
In March, Austal won a $68 million contract to design and build a ferry capable of carrying 502 passengers between Japan and South Korea, to be built before the 2020 Olympic Games in Tokyo.
‘In its 30th year, Austal has delivered near-record profit, strong operating cash flow, and as a result is able to increase dividends to shareholders,’ Mr Singleton said.
Austal lifted its final dividend to an unfranked three cents per share, from a fully-franked two cents last year.
By 1144 AEST, Austal shares were down 0.5 per cent to $1.74 in a firm Australian market.
AUSTAL PROFIT SAILING ON US NAVY CONTRACTS
* Full-year profit up 154 pct to $39 mln
* Revenue up 6 pct to $1.39 bln
* Final dividend unfranked 3.0 cents/share, from a fully-franked 2.0 cents year ago