Austal up on $US52m navy work
Stuart McKinnon
December 22, 2015, 8:50 am
One of Austal's Littoral Combat Ship undergoing trials in the Gulf of Mexico. Picture: Dennis Griggs.
UPDATE 1.25pm: Austal shares were firmer after it announced a $US51.7 million contract modification for its Littoral Combat Ship program with the US Navy.
And the shipbuilder said the scope of the work could increase to $US198.4 million if options were exercised.
The work includes design services for upgrades to the Littoral Combat Ship and preliminary design for the US Navy’s future frigate.
The work will be carried out at Austal’s manufacturing facility in Mobile, Alabama.
Austal chief executive Andrew Bellamy said the contract reflected the US Navy’s confidence in Austal’s ability to build and support highly advanced ships that met today’s changing requirements.
“This agreement is a key indicator of our maturing support business in the US,” he said.
Austal’s announcement will go some way to allay fears that the US Government’s plans to cut future orders for warships would affect the company’s long-term prospects in that market.
Shares in Austal were hammered earlier this month when the company announced that delays with its Littoral Combat Ship program would hit full-year earnings.
Austal shares were up 9.5 cents, or 6.44 per cent, to $1.57 at the close.
The West Australian
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