Austal reports improved margins, record revenues

austal andrew bellamyAUGUST 30, 2013 — Austal (ASX: ASB) CEO Andrew Bellamy said today that the company had taken major steps to deliver on its key objectives for the year as the shipbuilder reported record annual revenues of Australian $ 902.8 million, a 38 percent increase on FY 2012. Earnings were in line with market guidance: A$67.0 million EBITDA, excluding the sale of a stock yacht or A$38.8 million NPAT, excluding the sale of the stock yacht.

Andrew Bellamy

Net profit after tax was A$35.7 million.

Austal says it "drove sustained operational improvements and efficiencies in its businesses throughout the year to improve the company’s margins."

Overall group EBIT margins were 4.2 percent in the year with Austal achieving 5.2 per cent EBIT margin at its U.S. operations for the year compared to 2.7 per cent in FY2012.

Austal was also successful in meeting its target of a break even result at its Australian shipyard, recording an EBIT of A$0.5 million.

The company’s Philippines shipyard recorded a maiden EBIT of $5.0 million in its first full year of operations.

The Service and Systems division was restructured in the year to improve efficiencies and align with work opportunities.

"Our key objectives for the year were to drive operational improvements and efficiencies across our businesses and strengthen the balance sheet to support our record order book, and we took major steps in the year to deliver on those," said Mr. Bellamy.

"The operational improvements were very pleasing. Our EBIT margins in the U.S. grew to 5.2 per cent for the year, meeting our target of more than 5 per cent margin, through implementing the lessons learned from the construction and delivery of the first-in-class Joint High Speed Vessel across the shipyard.

"Outside the U.S. we returned our Australian operations to a break even result as construction on the $330 million Cape Class Patrol Boat contract increased, and we reported a maiden profit at our Philippines shipyard in its first full year as we delivered on commercial and wind farm vessels."

Mr. Bellamy said Austal was targeting revenue of A$1 billion in FY2014, while further improving EBIT margins in the U.S. and Australia as construction of Littoral Combat Ships and Joint High Speed Vessels for the U.S. Navy grows and the Cape Class contract matures following delivery of the first-in-class vessel in April.

"Looking ahead, our aim is to deliver on our record amount of work in hand by ensuring prudent cash management practices across our businesses," Mr. Bellamy said."We will also continue to pursue opportunities to win new defense vessel construction and service contracts, particularly in Asia and the Middle East, and continue the transfer of technological capabilities to our Philippines shipyard to secure new commercial contracts there."

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