Austal Limited announced its financial results for the fiscal year ending 30 June 2024 (FY2024), reporting a significant turnaround with Earnings Before Interest and Tax (EBIT) of $56.5 million.
This marks a substantial improvement from the FY2023 loss of $4.8 million, despite a 7 per cent year-over-year decline in revenue to $1.468 billion, the ASX-listed company said in a media release.
Austal’s EBIT performance was driven by its US operations, particularly from improved contributions in shipbuilding and a robust showing from its support business.
The company’s record order book, valued at $12.7 billion, extends over a decade, providing a solid foundation for future growth.
Financial overview
The company’s revenue of $1.468 billion for FY2024 represents a slight decline from $1.585 billion in FY2023, primarily due to a reduction in shipbuilding activities as programs transitioned.
Despite this, EBIT surged to $56.5 million, aligning with market expectations of a 3-4 per cent EBIT margin.
Exceptional items included a $57 million provision for legal costs and fines related to US regulatory investigations, and a $54 million profit from the sale of land in the US Austal’s Net Profit After Tax stood at $14.9 million, a recovery from the $13.8 million net loss recorded in FY2023.
Operational highlights
Austal’s US segment reported revenue of $1.17 billion, down from $1.23 billion in FY2023, with EBIT rising to $92.9 million from $5.2 million.
The segment benefited from a stronger performance in shipbuilding, which recovered to an EBIT of $25.1 million.
The company secured $1.4 billion in new contracts during the year, including a $779 million modification for the T-AGOS program.
In contrast, the Australasia segment faced challenges with a 17.3 per cent decline in revenue to $302.9 million, largely due to fewer commercial shipbuilding awards and delays in key government programs.
Consequently, the segment reported an EBIT loss of $12.6 million.
Strategic developments
Austal’s order book reached a record $12.7 billion as of 30 June 2024, bolstered by recent contract wins and additional awards.
The company is poised to secure further defence projects in both the US and Australia through the Strategic Shipbuilding Agreement (SSA) with the Commonwealth of Australia.
The company also announced changes to its leadership, with former US Secretary of the Navy Richard Spencer joining the board and assuming the role of Chairman on 1 July 2024, replacing John Rothwell.
Additionally, Michelle Kruger was appointed as President of Austal USA.
Outlook
According to Austal, it remains confident in its growth prospects, underpinned by its record order book and expanding revenue base.
The company plans a substantial capital expenditure program focusing on its US facilities, expected to commence in FY2025, to support future revenue and earnings growth.
CEO Paddy Gregg expressed optimism, stating, “Austal is now working on 14 different vessel programs, providing the company with diversity and a long runway of work and revenue.”
“Our focus is now on executing these programs safely and efficiently, while adding to our order book as opportunities arise,” he added.
Austal will provide EBIT guidance at or before its Annual General Meeting, with anticipated growth as operations in Australasia recover.
