Austal wins $US370m US Navy deal

Perth-based shipbuilder Austal's US division has won a $US368.6 million contract to build a fourth littoral combat ship for the US Navy.

The boat is scheduled for completion by 2014 and is the second to be awarded under the $3.8 billion 10-ship contract announced by Austal in December.

Austal chief executive Andrew Bellamy said: "the award of this second ship under the 10 ship block buy contract further affirms the US Navy's commitment to the LCS program and underscores their confidence in Austal to construct there vital ships."

Work currently underway for the US Navy at Austal's Alabama shipyard includes a littoral combat ship, and two joint high-speed vessels, the Spearhead and the Vigilant

Over the next 12 months Austal will begin construction of the LCS 6, the first vessel awarded under the December contract, and three more joint high-speed vessels.

Also, Austal announced a $20 million modification to the December contract.

"The modification allows the US Navy to exercise options for special studies, analysis, review and class-service efforts for the LCS program," Austal said in a statement.

"Austal USA will assess engineering and production challenges and evaluate the cost and schedule risks from affordability efforts to reduce future LCS acquisition and lifecycle costs."

At 10:00AM (WST) Austal shares had gained nearly 4 per cent to trade at $2.90.