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Investing.com-- Shares of Austal hit a record high on Friday after the Australian shipbuilder clocked a sixfold increase in its annual profit and signed a strategic shipbuilding agreement with the Australian government.
Austal Ltd (ASX:ASB) opened nearly 20% higher at a record high of A$8.07, outpacing a 0.3% drop in the ASX 200 index.
Austal’s net profit for the year to June surged 503% to A$89.7 million ($58.6 million), while revenue rose 24% to A$1.82 billion. The strong earnings were driven largely by Austal maintaining a robust order book over the past year, especially as it continued to win contracts from the U.S. and Australian governments.
Austal’s order book came close to a record-high $13 billion in the year.
The company said it had signed a Strategic Shipbuilding Agreement with the Australian government, which it sees further underpinning its orderbook. The company will create a new unit– Austal Defence Australia– which will be formally appointed as the Commonwealth of Australia’s strategic shipbuilder.
The contract is for a 15-year term, and will see the company build tier-2 surface combatants craft for the government at Austal’s facilities at Henderson in Western Australia.
Austal shares are trading up nearly 157% so far in 2025, with the company having benefited greatly from Australia and the U.S.-- its biggest customers– planning more defense spending.
South Korean conglomerate had earlier this year taken a 9.9% stake in Austal and had outlined plans to take an even bigger stake in the shipbuilder. Hanwha had earlier attempted to acquire Austal but was rebuffed.