Austal is shifting the focus of its Henderson shipyard to the defence industry, after it revealed the high Australian dollar and weak European markets slashed full-year profit expectations down to between $20 million and $23 million.
In February Austal turned in an interim net profit of $14.1 million, and with a series of lucrative contract announcements in recent months it was expected to build on that figure in its full year results.
In particular, Austal's November annoucement of a lucrative contract to build 10 Littoral Combat Ships for the US Navy, with each boat worth about $225 million, was expected to boost the company's coffers.
Austal said the high Australian dollar had taken its toll on its Western Australian operations, and coupled with a soft European commercial ferry market, its profits had taken a hit.
The company's shares were down 28 cents today, or 9.69 per cent, at $2.61.
Austal chief executive Andrew Bellamy said the company would review its Henderson operations, with the objective of refocusing the yard's capabilities towards the manufacture and support of defence vessels.
"We expect the prolonged strength of the Australian dollar to continue for the foreseeable future and this requires us to reposition our Australian business to respond to that challenge," Mr Bellamy said in a statement to the ASX.
"We will continue to seek commercial vessel opportunities, but with our internationally recognised defence capabilities, particularly in the US as the prime contractor on two large multi-vessel programs, it is logical to leverage off those credentials and refocus Henderson towards defence."
