Austal share price slides as revenue, profit contract in FY22

Austal posts FY22 earnings today.

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Key points

  • Austal posted FY22 earnings today 
  • Both revenue and profit contracted for the 12 months 
  • Yet, Austal's forward order book is the strongest on record, with $7 billion in its pipeline 

The Austal Ltd (ASX: ASB) share price is sliding during morning trade on Friday following the release of the company's FY22 earnings results.

At the time of writing, the Austal share price is fetching $2.61 apiece after sliding nearly 2% lower from the open.

Austal revenue, profit declines from FY21

Key takeouts from the company's earnings result include:

  • Revenue of $1.43 billion, down 9.1% year on year from $1.57 billion
  • Earnings before interest and tax (EBIT) of $120.7 million, up 5.3% year on year
  • Net profit after tax (NPAT) of $79.6 million, down 1.8% from last year's $81.1 million
  • Dividend of 4.0 cents per share declared, unfranked, bringing total year dividend to 8 cents
  • EBIT guidance for FY23 of around $100 million

What else happened in FY22 for Austal?

For the 12 months to June 30 2022, Austal generated $1.43 billion in revenue and EBIT of $120.7 million, a decrease and increase of 9% and 5% respectively.

Austal states the decline in revenue is mostly attributed to reduced throughput as the Littoral Combat Ship (LCS) programme continues to mature through to FY25.

The company announced in July that it had secured a contract for the design and construction of up to 11 'Offshore Patrol Cutters', commissioned by the US Coast Guard.

"Even though the Award had no impact on Austal's FY2022 operational performance, it positively
impacted various cost assumptions, such as Estimates at Completion (EAC) and labour utilisation as
at 30 June 2022," the company said.

Management commentary

Speaking on the announcement, Austal Chief Executive Officer, Paddy Gregg said:

Austal is successfully delivering on its core strategic initiative to transition beyond these maturing programmes.

Our investment in steel capability is already paying off and combined with our deep track record of
operational excellence in aluminium, we are optimally positioned to achieve diversified, long-term and
sustainable growth.

We have a significant orderbook and our enhanced operational capabilities supported by a strong
balance sheet give us further potential to grow across both the USA and Australasia.

What's next for Austal?

Austal notes it enters FY2023 with an order book of approximately $7 billion, which is the largest in the company's history.

This is underscored by the US Coast Guard's, which is worth up to $4.35 billion. With these points in mind, the company provided EBIT guidance of $100 million for FY23.

Austal share price snapshot

Austal shares are up more than 33% in the past 12 months.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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