Austal notches $1.3bn US Navy contract

Henderson shipbuilder Austal has secured a $1.28 billion contract from the United States Navy to construct three enhanced medical support ships.

ASX-listed Austal informed the market of the undefinitised contract award this morning for the final design and construction of three expeditionary medical ships (EMS) from its US headquarters.

EMS ships are dedicated medical vessels designed to provide patient holding, stabilization, evacuation and transport in support of distributed marine operations.

The ships are designed with a shallow draft, meaning it can directly access to austere ports, and its flight deck will be able to accommodate military aircrafts including heavy lift cargo helicopters.

The EMS ships are a variant of Austal’s expeditionary fast transport ships, of which the shipbuilder’s US branch has previously delivered 13 to the Unites States Navy.

Austal chief executive Paddy Gregg said the contract enabled the final detailed design for the EMS ships to be completed and construction of the three vessels to commence.

“The new EMS further extends the capabilities of the proven EPF platform, designed and constructed by Austal, to enable more complex medical procedures and operations to be performed onboard, at sea and underway,” he said.

“These three new EMS will enhance the US Navy’s capability to provide effective medical and surgical support anywhere in the world, quickly, safely and efficiently.”

It comes after Austal was annoited as the nation's shipbuilder of choice in WA, announced by Defence Industry Minister Pat Conroy at the shipyard in Henderson last month. 

Under the mooted heads of agreement deal with the federal government, Austal would secure a consistent platform of work, including the delivery of medium landing craft for the Australian Army.

Austal's shares were trading up 6.9 per cent  to $1.86 at 11:45AM AWST on today's contract news.