Austal high on commercial and defence projects

Austal, the Australian shipbuilder, reported a net profit after tax and outside equity interests of $20.1 million for the financial year ended 30 June 2004. This significantly improved result flows from a shift from building luxury yachts to patrol boats. Austal has consistently performed well in commercial vessels and patrol boats, which now constitute the greater part of the company?s revenue. Contracts already in hand guarantee work through to 2007 which contributes to a positive outlook overall.

Austal?s Managing Director, Bob McKinnon, said continued improvement in productivity in the commercial and defence contracts, particularly in the United States operation, and lower losses from the luxury yacht construction activities contributed to the turnaround from last year.

“The US operation?s financial results have improved markedly, with the loss being reduced from $12.9 million in 2003 to $1.0 million in 2004,” he said. “All outstanding motor yacht contracts have been completed and the facilities previously used for their construction are currently being utilised for the production of commercial and defence vessels.”

The decline in the luxury motor yacht activities was replaced by increased production of patrol boats. This resulted in total revenue of $310.1 million, a slight increase on the previous year.

Contracts on hand at 30 June 2004 amounted to $460 million to be completed across the 2005, 2006 and 2007 financial years. Approximately 70% of this is derived from defence-related projects and the remainder from commercial vessel construction.

“This workload provides a solid foundation for the future and a firm basis to further our strategy for growth through both commercial and defence opportunities in the United States, Australia and other markets around the world,” McKinnon said. Significant developments during the year that contribute to the positive outlook include:

Securing the contract to build 12 new 56 metre patrol boats for the Royal Australian Navy (RAN). Construction commenced on schedule in April 2004 and will continue until mid-2007

Progressing in the US Navy?s Littoral Combat Ship (LCS) project through the award of a final design contract to the General Dynamics team in which Austal is the ship designer and builder. This contract includes provision for options for the construction of two 127 metre vessels following the completion of the design phase in October 2005. The US Navy may ultimately purchase 60 ships over a 15 year period

Considerable interest in Austal?s trimaran technology from current ferry operators, particularly the 126.7 metre ferry ordered by Fred. Olsen, S.A. in June 2003 for operation in Canary Islands. Construction of this vessel has progressed according to plan and sea trials are scheduled for November 2004