AUSTAL has posted revenue growth for the first half of the 2023 financial year, but a “disappointing” earnings loss.
The Australian shipbuilder’s revenue increased by 7% in the first half of the 2023 financial year to $775 million.
However, it recorded an EBIT loss of $2 million (from a profit of $71.1 million in the first half of the last financial year) which Austal attributed to the recognition of loss provisions of the US Towing, Salvage and Rescue Ships (T-ATS) program in the company’s USA segment.
Austal CEO Patrick Gregg said the provisioned losses provided on the T-ATS program had a “disappointing” negative impact on the half-year results.
“It masks what would otherwise have been a good result underpinned by robust EBIT margins,” Mr Gregg said.
“Whilst management has submitted REAs and is making every effort to mitigate these losses, it is too early to form a view on whether and to what extent these losses can be reduced.”
Mr Gregg said beyond the T-ATS program, the company is successfully delivering shipbuilding and sustainment programs across its Australasia operations. Its Australian shipyard is in Henderson, WA.
“The Australasian sustainment business complements our growing operational excellence in the delivery of the Guardian-class patrol boats and Evolved Cape-class patrol boats, which helped generate a nearly threefold rise in Australasia EBIT to $14.4 million,” he said.
He highlighted recent progress on patrol boat autonomous trials for the Royal Australian Navy.
“We are at the forefront of building the vessels of the future by leveraging rapidly evolving systems capabilities.”
The Australasia segment reported revenue of $209 million in the first half of the 2023 financial year, a 6% increase on the first half of the 2022 financial year.
Austal said the revenue increase was propelled by a significant rise in support revenue as Austal grew its commercial maintenance footprint and continued to expand its maintenance workload with the RAN.
In Australasia, support EBIT rose from breakeven to $3.6 million and shipbuilding EBIT grew from $5 million to almost $11 million.
Austal said the shipbuilding EBIT result reflected the company’s delivery of the Guardian-class patrol boats as the 22-vessel program matures, as well as the eight-vessel Evolved Cape-class patrol boat program.
Construction of high-speed commercial ferries continued in Austal’s Philippines and Vietnam shipyards, with Express 5 (the largest vessel by volume to be built by an Austal shipyard) expected to be delivered in the coming days.
Austal said the Australasian sustainment business is well positioned to help the broader group reach its goal of delivering $500 million of annual sustainment revenue by the 2027 financial year.
