Austal Reports 2012 Revenue Up, Operating Profit Down
Shipbuilding & allied marine industries provider Austal publishes its financial report for year ended 30, June 2012.
The Group operating profit after tax for the year was $11.043 million compared with the previous year of $21.890 million. Revenue has increased by $149.140 million over the previous year while operating profit before tax has decreased by $7.235 million.
Extracts from the Chairman's Report:
This year’s results reflect some of the challenges Austal faces. Rapid growth and the difficulties of producing a new ship type undermined efficient program delivery at Austal’s busy US shipyard.In contrast, the Australian shipbuilding operation was unprofitable due to low activity levels. This stemmed from sustained economic downturn in key markets and a strong local currency.
Importantly, Austal has made good progress towards implementing strategies to position it better for the future. Austal’s success in securing two major US Navy prime contracts brings with it the dual challenges of expanding operations to deliver on those commitments while overcoming the issues producing revolutionary, first in class ships inevitably bring. While the US operation was profitable, those factors certainly influenced the results. Improvements will come as workforce experience grows, as new facilities come online, and as the programs move into the series production of follow on ships. There are clear signs of this recovery in the second half performance.
The strength of the Australian dollar, and weakness in core markets such as Europe, continued to adversely impact the Australian operation’s ability to profit from the commercial vessel markets it has traditionally served. This absolutely necessitated a change in strategy, and Austal implemented the core aspects of that change during the year. The company improved its competitive position by acquiring a shipyard in the Philippines. Combining this with Austal’s world-leading technology has already proved instrumental in securing commercial vessel contracts that the company could not otherwise have executed profitably.
Success in the United States has seen Austal emerge as an international prime contractor for defence programs, and the company leveraged off that to help secure an important Australian Government contract for the supply and in-service support of eight new Cape Class patrol boats. The Australian operation is using the project to help restructure itself to concentrate on defence contracting. Importantly Austal signed new shipbuilding contracts worth approximately $1.3 billion during the year. This new work helps to underpin a predictable revenue stream for a number of years to come.