Australia-based ship builder Austal Limited announced a record net profit of AUD53.2 million (USD37.4 million), up 66.8% on FY14 NPAT of AUD31.9 million, last week. It is the company’s best result in nearly three decades.
A global shipbuilder supplying Australian, Oman and the US defence forces, Austal posted AUD1.41 in revenue for the year. It also reported an order book of AUD3.1 billion in construction work taking it through to 2020.
The company attributed its rising fortunes to multiple vessel programmes, including major navy defence and patrol boat programmes. Although the growth industry in border controls combatting people smuggling in Australia was also a factor.
CEO Andrew Bellamy said the result reflected how Austal had evolved in recent years to deliver major defence vessel programmes. The company had also benefitted from a weakening Australian dollar.
“Austal reported record revenue and record earnings by delivering on major vessel programmes across our three shipyards in the USA, Australia, and the Philippines,” Bellamy said in a statement.
“Austal performed well on our US Joint High Speed Vessel contract, and we were able to generate strong earnings from our Australian operations through efficiency improvements on the Cape Class Patrol Boat programme. This offset the anticipated margin pressure on Littoral Combat Ship 6, which was the result of the lack of design maturity on our first vessel as prime contractor.”
Its Philippines shipyard reported AUD38.7 million revenue up from AUD33.8 million in FY2014, with its US-based business delivered revenue of AUD1.2 billion.
On the downside Austal announced in April it would be cutting back its Fremantle workforce by 300 as it completed contracts for Australian Border Force and Oman Navy over the next year.
However further expansion is not out of the question. In June Bellamy said his company would consider buying the government owned shipbuilder ASC.
“We would be interested in acquiring it (ASC) if it was on the right terms,” Bellamy told the Australian Financial Review.
The Adelaide based ASC is currently at the centre of some controversy over a submarine fleet contract the government was initially giving to Japan. After public outcry the government said ASC could participate in partnership with a Japan or European shipbuilder to help protect thousands of local shipbuilding jobs. German and French submarine builders have offered to buy a stake in ASC if they win the multi-billion dollar contract.