The Austal Limited (ASX: ASB) share price is pushing higher on Monday morning.
At the time of writing, the shipbuilder’s shares are up almost 2% to $2.36.
Why is the Austal share price pushing higher?
Today’s gain appears to have been driven by a combination of improving investor sentiment and the release of a positive announcement.
In respect to the latter, this morning Austal announced that construction has officially commenced on Austal USA’s new steel shipbuilding facility in Mobile, Alabama.
According to the release, Austal USA hosted a ceremony at the company’s shipyard on Friday to mark the start of the construction of the facility that will provide the capability to meet increasing demand by the U.S. Navy and U.S. Coast Guard for steel vessels.
The construction on the facility is expected to be complete by April 2022.
“Significant milestone”
Austal‘s Chief Executive Officer, Paddy Gregg, believes this is a significant milestone in Austal USA’s history. He also sees it as a strategic development in the shipyard’s capability.
Mr Gregg said: “Austal USA’s new steel shipbuilding facility puts us in a prime position to target numerous major steel shipbuilding programs included in the U.S. Navy’s shipbuilding plan. Today’s ground-breaking marks the start of construction of facilities that will enable Austal USA to build the next generation of the U.S. Navy and U.S. Coast Guards’ ships.“
Interim Austal USA President, Rusty Murdaugh, added: “As demand for the greater and larger Navy and Coast Guard fleets grows, Austal USA is investing to meet those changing requirements. We’re investing in our people, we’re investing in our processes and we’re investing in our facilities and capabilities.”
Austal will be spending approximately US$100million on the new facility. However, this will be co-funded by the United States Government.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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