Shipbuilder Austal diversifies revenue base with multiple new contracts

Perth-based ship designer and builder Austal Limited has diversified its revenue base by winning a number of contracts worth potentially US$75 million that could expose the company to significant long-term growth opportunities. While not necessarily material on an individual commercial basis, the contracts further diversify Austal’s near-term revenue base, the company says, with some early stage contracts providing a pathway for potential, future awards.

These future growth opportunities include emerging autonomous vessel market and non-prime module projects, which leverage Austal’s core shipbuilding, support, and advanced technologies expertise. They include:

• An ‘undefinitised contract action’ (UCA) with the US Navy to resolve the detail design for three fully funded Emergency Medical Ships (EMS) – with these ships to be valued at over US$900m
• Partnership with L3Harris Technologies to construct and modify autonomous capabilities in support of the US Navy’s Overlord Unmanned Surface Vessel (USV) Program
• Concept design for the US Navy’s Large Unmanned Surface Vessels (LUSV), involving a prototype of an unmanned ship that is capable of autonomous operation
• Appointment as the exclusive manufacturer of Saildrone, Inc.’s wind and solar-powered Surveyor USV, with discussions continuing as to the number of vehicles to be produced
• A trial with the Royal Australian Navy to develop ‘PBAT Sentinel’; a patrol boat modified with autonomous systems for autonomous operation
• Partnership with General Dynamics Electric Boat to train Austal personnel in the manufacture of Command and Control Systems Modules and Electronic Deck Modules for US Navy nuclear submarines
• A contract with Newport News Shipbuilding in the USA to fabricate aluminium aircraft elevators for two US Navy Ford-class aircraft carriers being constructed by Newport News Shipbuilding

Austal Chief Executive Officer Paddy Gregg said: “The new contracts and partnerships demonstrate our growing capabilities across a broad range of naval shipbuilding and support programs in Australia and the US, as we increasingly diversify our revenue base and expand our future growth pathways.

“This is all underpinned by our modern and agile shipyards that can build in steel and aluminium, small to large vessels, and conventional crewing or autonomous capability. Our shipbuilding capacity is complemented by our expanded advanced technology efforts in autonomy and additive manufacturing.

“Over the longer-term, our expanding and diversified shipbuilding pipeline has the strong potential to cascade through to our support business, taking us another step forward towards our annual revenue target of $500 million from the support segment by FY2027. Buoyed by a robust cash balance, we have the financial muscle to continue to invest in the future and achieve long-term profitable growth.”

Additionally, in the US, Austal is commencing production under a partnership with Saildrone, Inc. to be the exclusive manufacturer of the company’s ‘Surveyor’ uncrewed surface vehicle (USV). The 65-foot autonomous USVs are designed for deep ocean mapping and intelligence, surveillance, and reconnaissance (ISR) applications, above and below the surface. The USVs are wind and solar-powered, aligning with Austal’s growing focus on sustainability.