Austal releases results for a ‘transformational year’

INTERNATIONAL West Australian-based shipbuilder Austal has released its annual results for what CEO, Patrick Gregg described as “a transformational year” for the company.

It doubled earnings with revenue of nearly $1.5 billion, up 24% year-on-year with a near record $13.1 billion order book.

“We have seen important inflection points on earnings performance, the balance sheet repositioned for a major expansion in manufacturing capacity, and further growth potential in our near record order book following the recent approval of Austal as Australia’s Strategic Shipbuilder,” Mr Gregg said.

Net Profit After Tax increased by $75 million (up 503%) to $89.7 million, compared to FY2024’s $14.9 million.

In FY2025 Austal delivered seven vessels from its Australian, US and Philippines shipyards, and was awarded contracts for a further seven vessels that will be delivered by the Group’s shipyards over the coming years. A total of 49 vessels were under construction (or scheduled) during the year, with a further 73 vessels under sustainment by the Austal Group worldwide, according to the report.

Its US division reported an 18.2% increase in revenue to nearly $2 billion.

“USA Shipbuilding EBIT remained positive but was down 15.1% to $21.3 million (FY2024 $25.1 million) on increased revenue of $1,097.9 million (FY2024 $853.9 million). Consequently, Shipbuilding EBIT margin reduced to 1.9% from 2.9%, and reflected an increased mix of lower margin early construction programs relative to higher margin advanced Littoral Combat Ship (LCS) and Expeditionary Fast Transport (EPF) programs as they approach completion, and the drag from the onerous AFDM and T-ATS contracts,” the report said.

“Austal submitted a Request for Equitable Adjustment (REA) with the US Navy in November 2024 related to its onerous contract for the T-ATS program. Austal continues to engage positively with the United States Navy in relation to the REA claim, and it remains under review. Deliveries during the year included EPF-15 and LCS-38.

“Austal USA was successful in securing approx. $890 million of new contracts to significantly expand its manufacturing infrastructure in the USA to support the US Navy’s submarine programs. This included a US$450 million (approx. A$670 million) contract with General Dynamics Electric Boat to expand production capacity at Austal’s shipyard dedicated to manufacturing submarine modules (MMF3), and a US$152 million (approx. A$220 million) contract with the U.S. Navy to invest in infrastructure and facilities adjacent to Austal’s facilities in Mobile supporting the US Navy’s submarine programs.

“The United States Coast Guard (USCG) also exercised a US$273 million contract option in August 2025 for the construction of the second Stage 2 Heritage-class Offshore Patrol Cutter (OPC) and the acquisition of long lead-time material to support construction of a third Stage 2 OPC.

“EBIT from US support work increased from $67.8 million in FY2024 to $76.3 million, despite the lower revenue contribution during the year.”

Austal’s Australasian division reported a 45% increase in revenue to $438.0 million (FY2024 $302.9 million).

“The improved performance was driven by ongoing defence programs in Australia supplemented by increased commercial construction throughput at Austal’s Asian shipyards and the reversal of the drag encountered last year due to reduced workload and fixed overhead.

“Austal Australia delivered five vessels under the Evolved Cape class and Guardian-class Patrol Boat programs. Austal Philippines delivered one commercial ferry in less than 12 months, while also commencing work on an iconic new sailing cargo trimaran project, powered 100% by the wind. Austal Vietnam continued construction on an all-new steel hull monohull RoPax ferry, while also preparing to support module construction for a 130-metre hydrogen-ready catamaran to be delivered by Austal Philippines in CY2028.”

The report said that under the Strategic Shipbuilding Agreement (SSA) with the Commonwealth of Australia, Austal is now the prime contractor for the build and delivery for the Landing Craft Medium (expected to be 18 vessels) and Landing Craft Heavy (expected to be 8 vessels) programs previously announced as the pilot shipbuilding programs under the SSA.

“The Landing Craft Medium program alone is expected to be $1 billion to $1.3 billion, with the contract expected to be finalised in Q1 FY2026. Neither of these programs are currently included in Austal’s order book.

“Looking longer term, the Commonwealth has also announced a plan to build 11 Mogami-class General Purpose Frigates (8 to be built in Western Australia) and 6 Optionally Crewed Surface Vessels in Western Australia.

“Austal continues to invest in its shipbuilding and submarine capabilities with two major expansion projects currently underway in the USA, the Final Assembly 2 (FA2) project and the submarine Module Manufacturing Facility 3 (MMF3) project. Construction of FA2 has commenced and comprises a new assembly building and waterfront infrastructure (shiplift) to enable the delivery of current and future pipeline of large steel vessels for the US Navy and US Coast Guard.

“Austal remains well positioned both in the USA and in Australia to support its major US and Australian defence customers, as well as growing its commercial operations. The commercial contracts won by Austal during FY2024 and FY2025 should maintain levels of commercial activity during FY2026.”