Austal Swings to $54M Loss as US Contract Dispute Hits Earnings
Synopsis
Shipbuilder Austal swung to a $53.6 million full-year net loss from an $89.7 million profit a year earlier, as a reassessment of contractual claims following a dispute with the US Department of War offset stronger earnings from its Australasia business.
Henderson shipbuilder Austal posted a statutory net loss of A$53.6 million for FY2026, reversing an A$89.7 million profit a year earlier, as provisions against U.S. shipbuilding contracts drove an underlying EBIT loss.
Its revenue grew 11.3% to A$2.029 billion for the year ended June 30, 2026.
Group EBITDA declined to A$113.4 million profit in FY2025 to a A$125.2 million loss. It said the result reflected reassessment of expected recovery on several U.S. programs after accelerated relief sought by the company was not conceded.
US Contract Costs Drive the Loss
Austal USA posted A$202.8 million EBIT loss on revenue of A$1.383 billion on top of which 3.9% increase in shipbuilding revenue to A$1.140 billion were partly offset by provisions against several onerous contracts.
The Towing, Salvage and Rescue Ship and Auxiliary Floating Dry Dock Medium and Landing Craft Utility programs were among those impacted, it said, providing provisions that were largely non-cash with respect to contractual processes with respect to additional costs.
Austal has been making warships and commercial vessels for the U.S. Navy and Coast Guard, including independence-class Littoral Combat Ships and Expeditionary Fast Transport vessels. The company's operations in the United States also incorporate producing submarine modules.
Australian Operations Deliver Record EBIT
While the U.S. performance was disappointing, operations in Australasia were outstanding. Revenue from the region surged 49% to A$650.7 million, while EBIT rose 137% to A$85.3 million.
The company's order book stood at approximately A$16.5 billion at June 30, compared with A$13.1 billion a year ago, and it closed FY2026 with A$311.9 million in cash, A$186.3 million in net cash and A$435 million of undrawn debt facilities.
Founded in Henderson, Western Australia, in 1988, Austal has expanded its operations across Australia, the United States, the Philippines and Vietnam, designing, building and supporting commercial and defence vessels for customers including the Australian and U.S. governments.
In August 2025, the Australian government approved the Strategic Shipbuilding Agreement which names Austal as the Commonwealth's strategic shipbuilder for Tier 2 surface combatants for Western Australia. The contract includes programs for 18 Landing Craft Medium vessels and eight Landing Craft Heavy vessels.
In addition, Hanwha Defence USA has made a conditional, non-binding proposal to acquire Austal USA for an indicative enterprise value of US$1.05 billion to US$1.20 billion. The offer was excluding Austal's Australian, Philippine and Vietnamese operations, with due diligence continuing.
Source: Capital Brief
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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