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

Austal has announced its second contract this week with the US Navy.
The post Why the Austal (ASX:ASB) share price is rising today appeared first on The Motley Fool Australia. –

The Austal Limited (ASX: ASB) share price is lifting this morning after the company announced a contract award.

This comes after news earlier this week of a different shipbuilding contract.

At the time of writing, the Austal share price is swapping hands for $2.34, up 1.30%.

Details of the contract

In this morning’s release, Austal revealed it has been awarded a US$44 million contract from the United States Navy.

The fixed-price deal will see Austal design and develop an autonomous capability on the future USNS Apalachicola, an expeditionary fast transport (EPF) vessel. The shipbuilder has delivered a total of 12 Spearhead-class EPF vessels for the United States Navy.

Austal CEO Paddy Gregg welcomed the contract, saying:

Austal noted in our half year results presentation that the funding for an autonomous EPF conversion contract had been appropriated in the USA Government 2021 Budget, so we are pleased that it has now been converted into a formal contract.

Winning a $44 million contract is welcome from a revenue perspective, but strategically this contract award is even more significant for Austal.

Autonomous vessel capability has been identified as an area of strategic importance by the US Navy, so it is promising for Austal that the US Navy has awarded Austal USA a contract for the design, procurement, production implementation and demonstration of autonomous capability of one of our vessels, the Expeditionary Fast Transport (EPF) 13, the future USNS Apalachicola.

About the Spearhead-class EPF program

The Spearhead-class EPF is a 103-metre high-speed aluminium catamaran. The vessel has an 1,800 square metre cargo deck, medium-lift helicopter deck and can hold more than 300 troops.

The primary function of the EPF is to provide rapid transit and deployment of military forces, and equipment and supplies. The ship can also be used for maritime security operations to deploy humanitarian aid and disaster relief.

Austal share price summary

Austal shares have continued to trend lower over the the last 12 months by more than 30%. The company’s shares are around 15% up from their 52-week low of $1.98 seen in February.

Based on its share price, Austal ranks 326 on the ASX in terms of market capitalisation, valued at $836 million. The company has approximately 359.5 million shares on its registry.

The post Why the Austal (ASX:ASB) share price is rising today appeared first on The Motley Fool Australia.

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More reading

Why the Austal (ASX:ASB) share price is moving up today
Austal (ASX:ASB) share price lower despite new contract bid
Why the Austal (ASX:ASB) share price is edging higher

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.

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