Austal (ASB) H2 2024 earnings summary

Executive summary

• EBIT improved to $56.5 million in FY2024 from a $4.8 million loss in FY2023, driven by stronger US program contributions and support business growth, meeting earnings expectations.

• Revenue declined 7% year-over-year to $1,468.9 million due to lower shipbuilding activity as programs transitioned.

• Net Profit After Tax reached $14.9 million, reversing a net loss of $13.8 million in FY2023.

• Record order book of $12.7 billion, with additional $120 million in awards post-year-end, providing a 10+ year revenue horizon.

• Board and management changes included a new Chairman and President for Austal USA, with the founder stepping down as chairman.

Financial highlights

• FY2024 revenue was $1,468.9 million, down 7.3% year-over-year, mainly due to the maturing LCS program in the US.

• EBIT margin was 3.8%, in line with guidance, with underlying EBIT at $56.5 million, driven by strong US program performance offsetting Australasia losses.

• NPAT improved by $28.7 million to $14.9 million, but included a high US tax charge and DOJ penalty as a disallowable expense.

• Net cash at year-end was $3.9 million, down from $49.7 million in FY2023, primarily due to investments in US facilities and Mobile assembly expansion.

• No dividend declared, reflecting the need to preserve cash for future capital requirements and planned capex.

Outlook and guidance

• EBIT growth anticipated in FY2025, with recovery in Australian operations and improved productivity on key US programs; guidance to be provided at or before the AGM.

• Key drivers include the record order book, new contracts, SSA orders, and operational improvements.

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

• Substantial capex program planned for US facilities to support future growth, commencing FY2025.

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