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Investing.com--Austal Ltd (ASX:ASB) shares surged to an all-time high on Tuesday after the Australian government approved the company as the strategic shipbuilder for Tier 2 surface combatants under a landmark agreement.
The approval finalizes the Strategic Shipbuilding Agreement (SSA), designating Austal’s newly formed subsidiary, Austal Defence Australia, as the prime contractor for key naval programs in Western Australia, the company said.
Sydney-listed shares of the company surged as much as 7% to A$6.9, their highest level ever.
The SSA includes pilot projects for the construction of 18 Landing Craft-Medium and 8 Landing Craft-Heavy vessels, with the first contract worth A$1-1.3 billion expected to be finalized in early FY2026.
Austal CEO Paddy Gregg called the deal a "defining moment," highlighting its role in strengthening Australia’s sovereign shipbuilding capabilities.
In a separate announcement, the company raised its full-year EBIT forecast to at least A$100 million, up from the previously announced A$80 million.