Austal diversification shows returns

Austal Ships is emerging from turbulent times. It is forecasting a rebound to profits seen before the global industry downturn. With some A$350 million ($182 million) in orders for the Australian-based companies within the group, Austal is now in a position to forecast a rebound in fortunes, looking at a profit of A$28 million compared to last year?s A$14.5 million. The forecast jump in income reflects a projected 57% increase in revenues to A$295 in the 2001/2 financial year thanks largely to the group?s diversification. The only car ferry newbuilds being an 86m catamaran for Conferry and a 56m catamaran for Egypt?s El Salam Maritime and Transport Company. The latest order at the Austal shipyard is a A$50 million contract for three 42 knot 47.5m passenger catamarans for Hong Kong?s New World First Ferry. The latest in the group is a A$35-50 million contract for a 52m high speed aluminium motor yacht at Ocenafast. Smaller boat building subsidiary, Image Marine is building two 37m river catamarans for Portuguese operator Transtejo. Luxury motor yacht subsidiary Oceanfast is boosting revenue with A$250 million worth of orders for Greg Norman?s 69.5m aluminium expedition yacht and two 55m steel full displacement motor yachts for other buyers, in addition to its latest contract. Charter work with the US Marines for Austal?s Theatre Logistics Vessel provides a good footing for the type of defence work which is expected to eventually result in Austal USA becoming a huge company in its own right. In another important strategic manoeuvre to capture military business Austal has submitted a joint tender with Defence Maritime Services to bid for a A$450 million replacement patrol boat contract put out to tender by the Royal Australian Navy. The tender, which closed in late November is to build and design 15 new patrol boats, provide life logistics support, training and possibly financing of the boats. Austal?s managing director Bob McKinnon says this joint tender will present a formidable challenge to other bidders, Tenix, Australian Defence Industries, Australian Submarine Corporation, Incat and NQEA. Defence Maritime Services is a joint venture between P&O Maritime Services and Serco ? a task management service provider with Australian defence contracts. Austal has already designed and built eight 38m Bay class Patrol boats for Australian Customs Service, and is keen to position itself to cater for Australia?s rising coastal surveillance needs.