Austal, Australia's shipbuilding company, announced on Tuesday that it had secured a contract with the government for the construction of ships. It also raised its earnings forecasts. The shares rose to a new record high.

Austal Defence Shipbuilding Australia, a newly formed unit at the Henderson shipyard, in Western Australia, will be the strategic shipbuilder of Tier 2 Naval Surface Combatants, according to a company statement.

The Army will receive 18 lighter vessels and 18 landing craft.

Ben Richards said that the contract underpins Austal’s pipeline, and shows its unique capacity to build ships, as there are few other companies of this scale in a capital-intensive sector.

The company's shares jumped up to 7.9%, reaching a new record high of A$6.93. The company's shares ended 7.5% higher, while the ASX200 benchmark closed 1.3% higher.

The agreement includes a clause that allows the government to seize control of Austal’s local assets in the event that a foreign investor purchases more than 20%.

Hanwha Corp., which owns 9.9% of Austal, has been pursuing the Australian shipbuilder since 2024 when Austal rejected its A$1.02billion bid citing regulatory obstacles.

Austal also raised its forecast for full-year EBIT to at least A$100 millions, up from A$80million previously.

(source: Reuters)