AUSTRALIAN shipbuilder Austal has posted its second-highest EBIT on record for the 2022 financial year, but a drop in revenue.
The latest financial results suggest Austal’s revenue amounted to $1.4 billion in the 2022 financial year, down 9.1% on 2021 revenue results ($1.6 billion).
According to the company, the decline predominantly stemmed from reduced throughput as Austal’s Littoral Combat Ship program matures in the United States.
But the company’s EBIT reached $121 million, up 5.3% on the $115 million recorded in the 2021 financial year.
Austal CEO Paddy Gregg attributed the company’s EBIT growth to enhanced shipbuilding efficiencies and the award of an offshore patrol cutter contract.
“Enhanced shipbuilding efficiencies in the USA substantially offset a 9.1% decline in revenue as the LCS programme gradually winds down,” he said.
“COVID-19 induced impacts also affected the revenue result, albeit to a lesser extent.”
Mr Gregg said the NPAT of around $80 million was down 1.8% on last year’s figures, due to Austal’s higher effective tax rate which arose from the recognition of a tax loss in the 2021 financial year.
“We have spent the past two years diversifying the business and building a platform to grow our shipbuilding, support and systems businesses,” Mr Gregg said.
He said diversification had been achieved through mergers and acquisitions, with acquisitions in Cairns, Brisbane and San Diego, while divesting in a joint venture in China.
“We have also secured design contracts for long term programs which places us in a very good position to win more programs, so we are looking much further into the future to ensure a steady revenue stream with growth opportunities.
“This has already yielded pleasing results this year with the steel programmes won in the USA; the Evolved Capes in Australia providing work through to the next opportunities in the Force Structure Plan; and growth in line with expectation in the support segment.
“We continue to target diversified growth with ‘focus factory’ opportunities in the USA, our investment in systems in Australia, and autonomy and low emissions vessels globally.”
Austal’s Australasia segment reported revenue of $384 million (down from $406 million posted in the 2021 financial year), comprising 27% of total group revenue for the 2022 financial year.
The company said segment revenue was adversely impacted by COVID-19 induced travel restrictions weakening demand for orders in the commercial ferry market, as well as COVID-19 induced supply chain and labour mobility pressures impacting the timing of some milestone payments.
Supply chain and labour mobility pressures also affected the company’s operational cost base.
The company noted that despite the operational challenges, Austal delivered five defence vessels from Australia, including Guardian Class Patrol Boats and one Evolved Cape Class Patrol Boat for the Department of Defence.
In April 2022, the Department of Defence announced it would order an additional two Evolved Cape Class Patrol Boats for the Royal Australian Navy, for $124 million.
Looking ahead, Mr Gregg said Austal’s support business across the USA and Australasia is methodically expanding, and with the COVID-19 situation gradually improving and vessels returning to normal duties.
“While the commercial ferry market remains subdued, the signs for a rebound in the longer term are positive as travel restrictions continue to ease, which bodes particularly well for our Australasia segment,” he said.
“Our continued R&D investment in emissions efficiency and autonomy will ensure that as both the defence and commercial sectors evolve, we will be able to successfully deliver and maintain the ships of the future.”
