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Posted by Allen Newton
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07 Sep, 2026
AUSTAL has reported a mixed full‑year result, with record earnings in Australasia offset by a substantial non‑cash provision on US shipbuilding contracts, pushing the group to a statutory loss for FY2026.
The company released its annual results on 31 August, confirming revenue had passed the $2 billion mark for only the second time in its history.
The shipbuilder recorded $2.028 billion in revenue, up 11% year‑on‑year, driven by the ramp‑up of defence programs in both Australia and the United States. However, the group posted an earnings before interest and taxes (EBIT) loss of $125.2 million, compared with a $113.4 million profit the previous year, reflecting the impact of onerous US contracts where accelerated contractual relief was not granted by the US Department of War.
The standout result came from the Australasia segment, which delivered a record EBIT of $85.3 million, up 137% on FY2025. Revenue climbed 49% to $650.7 million, underpinned by strong performance across shipbuilding and sustainment operations in Australia, the Philippines and Vietnam.
Austal’s Australian yards benefited from major defence contracts awarded under the Strategic Shipbuilding Agreement, including: $1.029 billion Landing Craft Medium program (18 vessels); ~$4 billion Landing Craft Heavy program (eight vessels); and additional Evolved Cape‑class Patrol Boats for the Australian Border Force, valued at more than $285 million in aggregate.
Construction of the first LC‑M and LC‑H vessels is scheduled to begin in 2026, with deliveries stretching out to 2032 and 2038 respectively.
CEO Patrick Gregg said the Australian business was now in “an enviable position” with a $5+ billion, 12‑year build program providing long‑term stability and growth. He added that negotiations with Mitsubishi Heavy Industries on the Mogami‑class General Purpose Frigate are progressing, with contract award expected around FY2029 .
Austal USA reported an EBIT loss of $202.8 million, driven by the non‑cash provision relating to early‑stage design, rectification and commissioning costs on several programs, including the Offshore Patrol Cutter and T‑ATS vessels. The company has begun the formal contractual process to recover these costs through Requests for Equitable Adjustment (REA) and Contracting Officer decisions, supported by what it describes as a “documented factual and contractual record”.
Despite the provision, US shipbuilding revenue increased 3.9% to $1.14 billion, supported by new program revenue and submarine module manufacturing. Construction of the Module Manufacturing Facility 3 is progressing, with Phase 1 already operational and full completion expected in December 2026. The facility will support around 1000 jobs and is expected to become a major long‑term revenue stream.
A major development during the year was the indicative, non‑binding proposal from Hanwha Defence USA to acquire Austal USA for between US$1.05 and $1.2 billion. The offer applies only to the US business, preserving the value of Austal’s Australasian operations. Hanwha has been granted due diligence to improve certainty around any potential transaction.
Austal ended the financial year with $311.9 million cash at bank and net cash of $186.3 million, reflecting elevated capital expenditure of $352.7 million as the company invests in major expansion projects in both Australia and the US. Undrawn debt facilities of $435 million provide additional liquidity for the shipbuilder’s growth plans.
No dividend was declared for FY2026, with the board opting to reinvest capital into the business.
Austal says it is committed to returning to profitability in FY2027, supported by its strong order book, long‑term defence programs and expected growth in submarine module work. The company sees a clear pathway to doubling Australasian revenue within five years, driven by the Strategic Shipbuilding Agreement and future frigate and optionally crewed vessel programs .
The company’s Annual General Meeting will be held on 27 October in Perth.
