Even more overseas work for Austal

Jobs for Austal's US division are continuing to roll in with the Henderson-based defence contractor picking up $225 million worth of work to build two additional rescue ships for the US Navy.

That fixed-price incentive contract option, valued at US$156.1 million, is for the construction of two Navajo-class towing salvage and rescue ships.

The company was already contracted to build two of these ships for the US Navy, with Paddy Gregg saying in a statement to the ASX that the contract will further demonstrate the defence contractor’s steel shipbuilding capabilities.

“It’s a great sign of confidence by the Navy in the Austal USA team’s ability to deliver both steel and aluminium ships simultaneously that they have awarded a contract for another two vessels,” he said.

Today’s news comes as the Henderson-based shipbuilder announced earlier this month it had secured a contract to design and construct up to 11 offshore patrol cutters for the US Coast Guard.

Only one vessel has been contracted thus far, with Austal likely to secure $4.35 billion in works if it constructs another 10 ships.

Earnings before interest and tax are expected to be $107 million greater for FY2022 due to the project having a positive impact on some cost assumptions.

Construction of the Navajo-class ships will commence in the second half of 2023 with delivery expected in FY2026.

Shares in Austal were trading at $2.56 at 11:30 AEST.