Multiple contract awards valued over A$300 million diversify Austal's long-term revenue base

COMPANY ANNOUNCEMENT

20 JUNE 2022

Multiple contract awards valued at A$300 Million diversify Austal's long-term revenue base

Austal Limited (ASX:ASB) is pleased to provide information about a number of contracts that Austal has secured, which help to diversify the Company’s long-term revenue base while utilising its shipbuilding and support expertise.

Austal has recently been awarded contracts to:

• Sustain two Cape-class patrol boats the Company built for the Government of the Republic of Trinidad and Tobago (Trinidad and Tobago Coast Guard), in country

• Construct an additional two Evolved Cape-class Patrol Boats (ECCPB’s) for the Royal Australian Navy (RAN), announced by the Australian Government in April 2022.

• Undertake the Detailed Design and Construction (DD&C) of the United States Navy’s new Auxiliary Floating Dry Dock Medium (AFDM).

Combined, the awarded contracts are worth more than A$300 million.

Austal Limited Chief Executive Officer Paddy Gregg said: “The new contracts are a great demonstration of Austal’s capability to take on multiple projects across diverse naval shipbuilding and support programs, in Australia and overseas”.

“The Trinidad and Tobago support contract is another example of Austal constructing and then maintaining patrol vessels to ensure that they can operate safely and efficiently over extended durations, while providing important longer-term revenue to Austal.”

“The two additional Evolved Cape-class Patrol Boats announced by the Australian Government two months ago have now been officially ordered, bringing the total number of vessels to be constructed to eight; demonstrating great confidence in the vessel platform by the Royal Australian Navy, who are already operating three of the patrol boats throughout Northern Australia.”

“The competitively awarded, US$128 million contract for the Floating Dry Dock is Austal USA’s second steel vessel program for the US Navy and clearly demonstrates the Navy’s confidence in the Mobile, Alabama shipyard’s growing capability to deliver aluminium and steel vessels.”

Support contract for two Cape-class Patrol Boats

Austal has secured a two-year contract to sustain the two Cape-class Patrol Boats the company constructed at its Australian operations for the Trinidad and Tobago Coast Guard (TTCG).

The two 58 metre vessels, TTS Port of Spain (CG41) and TTS Scarborough (CG42), will be sustained by Austal in-country, through to at least 2024.

“We have been very clear that we want to grow Austal’s support business and this is a perfect example of how Austal can support vessels constructed so that not only do the vessels continue to perform optimally for our clients, but also create a recurring revenue stream post-construction,” Mr Gregg said.

Austal Australia will provide in-country support to the Trinidad and Tobago Coast Guard for the two Cape class Patrol Boats designed and constructed by Austal Australia, and delivered in 2021 for an initial two year period (Image: Trinidad and Tobago Coast Guard)

Additional two Evolved Cape-class Patrol Boats for the Royal Australian Navy

Austal Australia was awarded a A$324 million contract to construct six 58 metre ‘Evolved’ Cape-class Patrol Boats (ECCPB’s) for the Royal Australian Navy in May 2020 and has already delivered one vessel, the ADV Cape Otway, in March 2022. 

All remaining five vessels initially ordered are in various stages of production at the company’s Henderson, Western Australia shipyard. The additional two ECCPB’s, announced by the Australian Government on 18 April 2022 and valued at A$110 million (to be adjusted for relevant inflation impacts), bring the total number of vessels to be delivered to eight and extend production at the shipyard through to 2024.

Austal Australia will construct an additional two Evolved Cape-class Patrol Boats for the Royal Australian Navy, bringing the total number of ships to be delivered to eight. (Image: ADV Cape Otway; Austal Australia)

Austal USA has commenced construction of two Navajo-class towing and salvage (T-ATS) vessels for the US Navy, marking the commencement of steel shipbuilding at the Company’s facility in Mobile, Alabama. Officially opened last month, the US$100 million facility was funded 50:50 by Austal and the United State Government.

The T-ATS program is a US$145 million contract to build two ocean-going tug, salvage, and rescue capabilities to support U.S. fleet operations and will be a multi mission common hull platform capable of towing heavy ships. These ships will be able to support current missions, including oil spill response, humanitarian assistance, and wide area search and surveillance.

The United States Navy’s new Auxiliary Floating Dock Medium (AFDM) will also be constructed at Austal USA’s steel manufacturing facility in Mobile, Alabama. The “Rennie” type floating dock will incorporate features to improve operability and maintainability, based on Austal USA’s experience from owning, operating and maintaining a similar dry dock at its repair facility in Mobile. With a lifting capacity of over 18,000 tonnes, length overall of 211 metres and working area of nearly 8,500 square metres, the dry dock will have the capability to service large vessels such as Littoral Combat Ships (LCS), Guided Missile Destroyers (DDG), Guided Missile Cruisers (CG) and Landing Ship Docks (LSD’s).

Austal Australia is also delivering 21 steel-hull Guardian-class Patrol Boats for 12 Pacific Island nations and Timor Leste under the SEA3036-1 Pacific Patrol Boat Replacement Project, with fifteen patrol boats delivered since 2018. Austal provides in-service support to both the Cape and Guardian-class Patrol Boat fleets through an expanding service centre network including Henderson, Western Australia, Cairns, Queensland and Darwin, Northern Territory.

This ASX announcement has been approved and authorised for release by Patrick Gregg, Austal Limited’s Chief Executive Officer. 

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