The Austal Ltd (ASX: ASB) share price is on watch today after the company announced an expected FY26 group EBIT loss of around $113 million, driven by non-cash provisions at Austal USA. Meanwhile, the Australasian business is forecast to post a strong EBIT of approximately $62 million, highlighting robust performance locally.
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What did Austal Ltd report?
- FY26 group EBIT expected to be a loss of around $113 million (unaudited)
- Austal USA forecast EBIT loss of approximately $175 million, following revised contract recoverability
- Austal Australasia business remains strong, with expected EBIT of about $62 million
- Cash at bank of $312 million as at 30 June 2026; $366 million as at 31 July 2026
- Received a non-binding, conditional offer from Hanwha Defence USA to acquire Austal USA for US$1.05–1.2 billion
What else do investors need to know?
Austal USA has begun formal steps to recover value on certain US defence contracts after discussions failed to secure accelerated contractual relief. This resulted in a notable non-cash accounting provision, impacting reported earnings but not underlying operations or long-term prospects.
Importantly, the non-binding proposal from Hanwha Defence USA to acquire Austal USA excludes the company's Australasian core operations. The strategic shipbuilding agreement with the Commonwealth of Australia remains intact, providing continuity and supporting value for shareholders.
Austal also maintains a healthy liquidity position, with ample undrawn debt facilities and a record $17 billion order book supporting ongoing growth. The proposed sale process is still at an early stage and subject to due diligence and various regulatory approvals.
What's next for Austal Ltd?
The company intends to focus on its high-performing Australasian business, continuing to deliver for government clients and progressing key shipbuilding projects under its long-term agreements. Austal USA will pursue recovery of its US contract claims through formal channels, although the timing and potential outcomes remain uncertain.
With the Hanwha offer now under assessment, Austal's board will evaluate any more certain proposal that emerges, aiming to act in the best interests of all shareholders. Management has reiterated the group's strong balance sheet and commitment to ongoing transparency as events unfold.
Austal Ltd share price snapshot
It has been a terrible 12 months for the Austal share price. During this time, the shipbuilder's shares have lost over 40% of their value. As a comparison, the S&P/ASX 200 index (ASX: XJO) has risen over 4%.
