The Austal Ltd (ASX: ASB) share price is in focus today after announcing a fresh A$136 million contract for two extra Evolved Cape-class Patrol Boats to be delivered to the Australian Border Force.
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What did Austal report?
- Secured a contract extension to build two more Evolved Cape-class Patrol Boats, worth approximately A$136 million
- This raises the total number of ECCPBs for the Australian Border Force to six vessels
- Record order book now exceeds A$17.7 billion, including other major defence projects
- Ongoing delivery of Evolved Cape-class Patrol Boats to the Royal Australian Navy, with ten already handed over
- Annual contribution of A$500–700 million to the order book from local and international defence programs
What else do investors need to know?
Austal has a strong track record, having delivered eight original Cape-class patrol boats to the Australian Border Force from 2012 to 2015, plus further deliveries to other customers including the Royal Australian Navy and Trinidad and Tobago Coast Guard.
The company continues to benefit from Australia's focus on sovereign shipbuilding, with support from federal programs and Defence partnerships. The new award signals ongoing faith in Austal's ship design and delivery capability.
The company provides in-service support from multiple sites around Australia and remains a key supplier in the Pacific Patrol Boat Replacement Project (SEA3036-1), approaching completion of 24 vessels.
What did Austal management say?
Chief Executive Officer Paddy Gregg said:
Austal has delivered ten Evolved Cape-class Patrol Boats to the Royal Australian Navy in just over five years, and construction is well advanced on the first four vessels for the Australian Border Force. These additional two vessels further strengthen our record order-book of more than A$17.7 billion, which includes eighteen Landing Craft Medium and eight Landing Craft Heavy vessels to be delivered to the Australian Army, under the Strategic Shipbuilding Agreement with the Commonwealth of Australia.
What's next for Austal?
Looking ahead, construction of the two new patrol boats will take place at Austal's Henderson shipyard in Western Australia, supported by a national supply chain and close collaboration with Defence.
Austal's record order book gives strong long-term revenue visibility, with projects spanning both military and government customers at home and overseas. Management's focus remains on on-time delivery and growing its sustainment and export businesses.
Austal share price snapshot
Over the past 12 months, Austal shares have declined 18%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.
