Insights

Austal (ASX:ASB) share price sinks 13% on weak FY21 result

How did the company perform for the FY21 full-year? We take a look
The post Austal (ASX:ASB) share price sinks 13% on weak FY21 result appeared first on The Motley Fool Australia. –

The Austal Limited (ASX: ASB) share price is falling heavily on Tuesday morning. This comes after the shipbuilder released its full-year results for the 2021 financial year.

At the time of writing, Austal shares are down 13.55% to $2.17. It’s worth noting the Austal share price touched a four-month high of $2.51 last Friday.

Austal share price plummets on disappointing revenue hit

The Austal share price is sinking today following the company’s FY21 results for the 12 months ending 30 June, 2021. Here are some of the key results:

Total revenue of $1,572 million, down 24.6% on the prior corresponding period (FY20 $2,086 million);
Earnings before interest and tax (EBIT) of $114.6 million, down 12.1% (FY20 $130.4 million);
Net profit after tax (NPAT) of $81.1 million, up 9.7% (FY20 $89 million); and
Unfranked final dividend of 4 cents per share, bringing full-year dividend to 8 cents apiece.

What happened to Austal in FY21?

Austal advised that its financial results, predominantly revenue and EBIT, were in line with previous guidance estimates.

The company’s numbers were affected by an appreciation of the United States dollar, which translated into a negative impact for EBIT. In addition, the Littoral Combat Ship (LCS) program decline, COVID-19-related border closures and travel restrictions, and resourcing challenges also weighed in.

Nonetheless, the EBIT, despite the fall, was driven by enhanced shipbuilding margins, particularly in the US and Australasia operations.

This led Austal to achieve its second-highest NPAT in its history. Furthermore, 19 ships were delivered to customers, a record amount in a year. However, this didn’t stop the Austal share price from plunging this morning.

What did management say?

Austal CEO Paddy Gregg commented on the milestone achievement, saying:

I’m very pleased that Austal has delivered strong profit and earnings, as we strengthen our position to unlock significant long-term opportunities in the shipbuilding industry and broader defence sector.

…This is a testament to the durability of our operations and our ability to maintain a robust financial base, even amidst the challenges of a COVID-19 impacted environment in FY2021.

Importantly, the momentum we have generated by continuing to successfully deliver for key customers, despite COVID impacts, will enable the company to transition towards the next phase of business growth as our Littoral Combat Ship construction program winds down over the next three years.

What’s next for Austal in FY22?

Looking ahead, Austal expects market conditions for FY22 to remain similar to FY21, with the pandemic having a mixed impact.

Consequently, the company refrained from providing EBIT guidance for FY22. It anticipates the next market update will be given to shareholders at its annual general meeting later this year.

It will be interesting to see what effect that has on the Austal share price.

So far, Austal holds a current order book of $2.5 billion, running through until FY25.

Austal CEO Paddy Gregg also went on to talk about the wind-down of the LCS program for the next 3 years, adding:

Fortunately, we are progressing through this transition period from a position of strength with a healthy balance sheet; opportunities that are real and already visible; and a supportive US Government which is directly investing in the future of our facilities.

The post Austal (ASX:ASB) share price sinks 13% on weak FY21 result appeared first on The Motley Fool Australia.

Should you invest $1,000 in Austal right now?

Before you consider Austal, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Austal wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why the Austal (ASX:ASB) share price is pushing higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!