Austal shares surge on US Navy contract
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More news: Austal shares advanced after the ship builder announced that its US business has been awarded a US$450 million ($670 million) contract to expand production capacity in support of the US Navy Submarine Industrial Base.
Shares were up 8.48% to $2.43 by 12:25pm AEST, having added 30% since the start of the year.
Austal awarded $670m contract to expand US Navy production
The news: The US subsidiary of Perth-based ship builder Austal has been awarded a USD450 million ($670 million) contract by US business General Dynamics Electric Boat, to expand production capacity at its US shipyard in support of the US Navy Submarine Industrial Base.
The context: ASX-listed Austal said the contract will fund Austal USA to enhance its existing infrastructure by designing, constructing and outfitting a new module fabrication and outfitting facility at its shipyard in Mobile, Alabama. The expansion aims support the US Navy's goal of delivering one Columbia-class and two Virginia-class submarines each year.
Construction of the new building will start this US autumn and will be completed in 2026, the company said. When fully operational, the building will support around 1,000 jobs and provide capability to fabricate, outfit and transport submarine components.
General Dynamics Electric Boat, a subsidiary of General Dynamics Corporation, is the primary building of submarines for the US Navy.
What they said: "General Dynamics Electric Boat has recognised that Austal USA is a solid partner to deliver high-quality components for Virginia- and Columbia-class submarines," Austal CEO Paddy Gregg said.
"This growing partnership demonstrates confidence in Austal USA's commitment to meet the needs of the US maritime industrial base and support the most critical needs of the US Navy."
The source: ASX announcement
