The Austal Ltd (ASX: ASB) share price plunged today amid the company receiving some "disappointing" news.
Austal shares finished the day at $1.775 each, a fall of 11.25%. In contrast, the S&P/ASX 200 Index (ASX: XJO) finished 0.5% higher.
Let's take a look at what impacted Austal's performance today.
Key project collapses
Austal's plan to build offshore patrol vessels [OPVs] for the Philippines Navy has fallen apart. Austal is a global shipbuilder and defence company with 7 shipyards in 5 countries, including the Philippines.
The Philippines Navy has decided to sole-source foreign-built vessels instead of Austal's vessels. These were to have been acquired through a Government Memorandum of Understanding with the Commonwealth of Australia.
Commenting on the news, Austal CEO Paddy Gregg said:
It's disappointing that after several years of working together with PN to develop an agreed specification and price for this project, at the final stages of negotiations PN elected to pursue an offshore build on different terms.
However, we remain very enthusiastic about the capabilities of our Cape platform for OPVs and look forward to discussing it with other potential buyers in future.
Austal now plans to work on securing orders for commercial ferries at its Philippines shipyard.
The company recently delivered the 14th guardian-class patrol boat to the Australian Department of Defence. This is the first of 9 navy ships scheduled for delivery to the federal government in 2022.
Austal share price snapshot
The Austal share price has dropped 19% in the past 12 months, shedding almost 14% in the past week alone.
In comparison, the benchmark ASX index has gained 9% in the past 12 months.
Austal has a market capitalisation of about $642 million based on its current share price.
