Austal results show the profit power of Australia's niche champions

As @AuManufacturing’s Australia’s niche champions series continues today with a profile of Seeley International, shipbuilder Austal is showing the power of competing in a global marketplace.

The Perth company today reported record revenues and profits as its leadership in global aluminium ship construction and geographic and product diversification pay dividends.

In the 2020 financial year the company’s earnings before interest and tax (EBIT) were up 41 per cent to $130.4 million, on revenues up 13 per cent to $2.09 billion.

Net profit after tax (NPAT) was 45 per cent up to $89 million.

Austal is the world’s leading multi-hulled aluminium ferry builder, but now earns the majority of its profits building aluminium navy ships in the United States.

Last week @AuManufacturing reported Austal had bought land adjacent to its Mobile, Alabama shipyard (pictured, below) to expand its aluminium shipbuilding capabilities into construction of larger, steel-hulled vessels.

Austal also makes Cape and Guardian class naval patrol boats in Perth, giving it an entry point into supplying the Royal Australian Navy.

As well as moving into steel construction, Austal has also been diversifying geographically, with its Philippines ferry yard now mature enough to produce the largest ferries, and a new Vietnamese yard producing its first vessels.

Together with its home yard at Henderson south of Perth, the company can now supply from a choice of skills intensive and cost effective locations.

All Austal ships wherever built feature a high level of Australian content in intellectual property in hull design as well as sophisticated components and sub-systems manufactured on these shores.

The company now has extraordinary momentum with a secure order book worth $4.3 billion guaranteeing work and profits past 2024.

It has $397 million cash in the bank enabling it to continue expansion and increase dividends – dividend for the last six months of FY20 was up a third on the previous corresponding period to eight cents a share.

Austal COO Patrick Gregg said: “The financial results highlight the success of our ongoing strategy to grow our defence business, which now makes up approximately 88 per cent of the group’s revenue across construction and support.

“The value of this is clear as we see the broader defence market is strengthening and has largely been shielded from the economic impacts of Covid-19.”

Gregg has been named as CEO and will shortly succeed David Singleton.

@AuManufacturing’s Australia’s niche champions series is brought to you with the support of the Innovative Manufacturing Cooperative Research Centre, and SMC Corporation.