Austal wins more US Navy work

Shipbuilder Austal has won a $US51.7 million ($A71.8 million) contract to provide upgrade services to the company’s biggest customer, the US Navy.

The scope of work under the contract involves design services for upgrades to littoral combat ships Austal has built for the US Navy, and preliminary design for the navy’s future frigate.

In a statement, Austal said the value of the contract is expected to increase to about $US198.4 million over three years if options are exercised.

“Work will be performed at Austal’s state-of-the-art ship manufacturing facility in Mobile, Alabama,” the shipbuilder said.

“Work will begin immediately based on the $US51.7 million funding with an additional $US14 million funding expected in March, with the remaining funding expected in two yearly increments 12 months after the initial awards.”

Austal chief executive Andrew Bellamy said the contract reflected the US Navy’s confidence in the company’s ability to build and support highly advanced ships and to meet today’s changing requirements.

Austal shares lost nearly 40 per cent of their value in December after the company announced a potential 2 per cent shaving of its profit margin in the US due to problems at its American operations.

Shares in the Perth company were 4.4 per cent higher to $1.54 each at 10:20am.