Austal (ASB) H2 2024 earnings summary

Executive summary

• FY24 revenue was AUD 1.469 billion, down 7.3% year-over-year, but EBIT improved from a AUD 4.8 million loss in FY23 to a AUD 59 million profit, meeting guidance despite lower shipbuilding throughput and Australasian challenges.

• The company operates five shipyards and eight service centers across four countries, with a record order book of AUD 12.7 billion and 45 ships under construction or scheduled.

• Service and support business grew, achieving AUD 468 million revenue, tracking ahead of the AUD 500 million FY27 target.

• Strategic Shipbuilding Agreement in Australia and new US contracts underpin long-term growth, with significant expansion in shipbuilding and technology segments.

• Leadership transition occurred, with the founder stepping down as chairman and a new chairman appointed.

Financial highlights

• Group revenue decreased by AUD 116 million to AUD 1.469 billion, mainly due to the maturing LCS program in the US and minimal commercial vessel construction in Australasia.

• Underlying EBIT was AUD 59 million, in line with expectations, driven by strong US program performance offsetting losses in Australasia.

• EBITDA increased by AUD 68.8 million to AUD 123.7 million; NPAT rose by AUD 28.7 million to AUD 14.9 million year-over-year.

• Net cash declined to AUD 3.9 million, primarily due to investments in San Diego and Mobile, and no dividend was declared to preserve cash for future requirements.

• Operating cash flow was negative at AUD (13.0) million, impacted by onerous contracts and investment in growth.

Outlook and guidance

• EBIT growth anticipated in FY25, driven by recovery in Australasia, record order book, SSA orders, and productivity improvements on T-ATS and AFDM.

• Guidance for FY25 will be provided ahead of the AGM, with key drivers including new contracts and operational improvements.

• Strategic Shipbuilding Agreement in Australia expected to provide a 20-year pipeline and continuous naval shipbuilding.

• Additional orders expected through SSA; full benefits of San Diego support facility to be realized from FY2026.

• Significant hiring planned, with over 2,000 new roles expected in the next 2-3 years.