Austal secures $135m patrol boat contract extension

The Austal Ltd (ASX: ASB) share price is in focus after the company announced it has been awarded a further contract extension worth more than $135 million to build two new Evolved Cape-class Patrol Boats for the Australian Border Force, bringing the total contracted to 14 vessels.

What did Austal report?

• Contract extension worth over $135 million for two additional Evolved Cape-class Patrol Boats
• Total number of Evolved Cape-class vessels contracted up to 14
• Nine vessels already delivered to the Royal Australian Navy
• Two more Evolved Cape-class boats already under construction for the Australian Border Force
• New boats to be built at Austal’s Henderson, Western Australia shipyard
• Strong ongoing relationship with Australian Border Force and Department of Defence

What else do investors need to know?

Austal has supplied the Australian Border Force and Royal Australian Navy with 12 Evolved Cape-class Patrol Boats since 2020, and the latest order lifts that to 14. This highlights continued confidence in Austal’s naval capability and in the Cape-class platform’s performance.

The vessels feature modern crew accommodations for up to 32 personnel as well as advanced systems designed to boost operational effectiveness and sustainability. Construction of these additional patrol boats will support a national shipbuilding supply chain based in Western Australia.

Austal continues to support Australia’s defence requirements through other programs too, including the Guardian-class Patrol Boat initiative, with 22 out of 24 vessels already delivered.

What did Austal management say?

Chief Executive Officer Paddy Gregg said:

Over the past five years, the Evolved Cape-class Patrol Boats have proven themselves as highly capable, reliable assets for Australia’s border protection missions…With nine Evolved Capes already delivered and performing exceptionally with the Royal Australian Navy, and two more already under construction for the Australian Border Force, this new order further enhances Australia’s maritime surveillance and response capability across Northern Australia and our vast maritime domain.

What’s next for Austal?

Austal will construct the two new vessels at its Henderson, WA facility, backed by its experienced supply chain and project teams. The company continues to focus on strengthening Australia’s sovereign naval shipbuilding and maritime support capabilities through high profile defence contracts.

Looking ahead, Austal says it will keep providing in-service support for both Cape-class and Evolved Cape-class patrol boats and maintain progress on the Guardian-class program, reinforcing its position as a key partner for Australia’s naval and border protection.

Austal share price snapshot

Over the past 12 months, Austal shares have risen 106%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.

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The post Austal secures $135m patrol boat contract extension appeared first on The Motley Fool Australia.

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