Austal boosts FY20 guidance

Henderson-based shipbuilder Austal has raised its full-year revenue guidance by $100 million, saying the coronavirus pandemic has had minimal impact on its operations over the past two months.

The company today said it expected to achieve group revenue of around $2 billion for the 2020 financial year, up from $1.9 billion from its previous guidance, and group earnings before interest and tax (EBIT) to be no less than $125 million, compared with its $110 million.

Guidance on Austal’s US shipbuilding EBIT margin remains unchanged, at 7.5-8.5 per cent.

The company was trading 10.2 per cent higher on the news at 11:05am AEST, after requesting to end its trading halt, to $3.34 per share.

Chief executive David Singleton said Austal's strong performance in Australia, Philippines, Vietnam and the US had provided the confidence to raise its FY20 guidance.

The company has acknowledged a potential hit from the virus during June, despite experiencing “a more limited impact” on its performance during April and May.

At the beginning of the month, Austal was awarded a $324 million contract to design and build six Cape-class Patrol Boats (CCPBs) for the Royal Australian Navy – representing the largest construction contract for an Australian vessel ever awarded to the company.

The news followed an announcement in March from Austal, saying its US shipbuilding businesses would remain open during the COVID-19 pandemic.

Austal’s US operations contribute 77 per cent towards group revenue and 89 per cent to EBIT.

Shares in the company have dropped back to $3.25, as at 1:20pm AEST.