Austal Limited (ASX: ASB) shares will be on watch today following the company’s announcement regarding a completed vessel delivery. By yesterday’s market close, the Austal share price had fallen 1.6% to $2.41.
Here is what the global defence shipbuilder announced on Wednesday night.
What could impact the Austal share price today?
The Austal share price could be on the move today as investors digest the company’s latest update.
According to yesterday’s late market release, Austal has delivered its ninth guardian-class patrol boat to the Australian Department of Defence.
The vessel, named ‘HMPNGS Rochus Lokinap’, was gifted to the Papua New Guinea Defence Force under the Pacific Patrol Boat Replacement project. This took place during a certificate signing ceremony at Austal’s Henderson shipyard in Western Australia.
Austal stated that this is the second guardian-class patrol boat handed over to Papua New Guinea. In 2018, the company delivered the ‘HMPNGS Ted Diro’ as part of the Australian Government’s Pacific Maritime Security Program. Two more guardian-class patrol boats are in the pipeline for Papua New Guinea within the next two years.
The guardian-class patrol boats have an array of capabilities to support important mission objectives. These ships are built to be fast for seakeeping and can be retrofitted to mount machine guns or an autocannons if required. In addition, the boats have up-to-date electronics suites.
With these navy assets, Papua New Guinea will be able to conduct border patrols, regional policing, search and rescue, and other operations.
Austal CEO comments
Paddy Gregg, Austal CEO, commented on the company’s full service, and positive relationship between Australia and Papua New Guinea. He said:
Austal not only design and construct the Guardian-class, but also deliver a comprehensive training program to each crew accepting the vessels. Through this successful handover process, we are continuing to develop a very strong, productive relationship with the Papua New Guinea Defence Force and their crews.
More on the Pacific Patrol Boat Replacement project
The Pacific Patrol Boat Replacement project was awarded to Austal in May 2016. The shipbuilder was granted an additional contract option, taking the program to 21 vessels. In total, the value of the contract is estimated to be more than $335 million.
Twelve Pacific Island nations including Papua New Guinea, Fiji, Samoa, Vanuatu and others will receive the vessels through to 2023.
Austal share price review
The Austal share price has sunk by around 14% over the past 12 months and is down close to 10% year to date.
On current valuation grounds, Austal has a market capitalisation of about $866.5 million, with almost 360 million shares outstanding.