Austal massively increases revenue forecast

Perth shipbuilder Austal (ASX: AST) has massively increased its earnings guidance for this financial year.

In an announcement to the exchange it dramatically upped sales guidance from $1.3 billion for the year to $ 1.9 billion.

@AuManufacturing reported earlier this month that the company was building a major sustainment business for the ships it was building for the US Navy.

Now burgeoning orders have caused a rethink, with two orders received in September and another two in December for its giant trimaran hulled Littoral Combat ships.

As well as new orders, the company has achieved faster build rates for the LCS’s it has under construction at its US shipyard.

The company has also received some contracts from the USN earlier than expected, and boosted turnover with the completion of its yard in Vietnam.

Finally revenues booked from its US, Vietnamese and Philippine operations equate to more Australian dollars with the softening of our exchange rate.

The announcement said: “The incremental revenue is distributed over a number of different contracts with varying EBIT margins.

“In addition, Austal’s policy is to recognise profit at a lower level in the early stages of procurement and production for new vessel designs or existing designs that are undergoing material modifications or upgrades.”

Austal now expects earnings before interest and tax of between $39 million and $41 million for the financial year.

Picture: Austal/LCS class ship

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