Austal shares rise as US Coast Guard exercises options worth $480m
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The news: Ship builder Austal has been approved by the United States Coast Guard to order long lead time materials for three offshore patrol cutter (OPC) programs, valued at USD314 million ($480 million).
The numbers: Austal shares were up 2.3% to $7.88 at 12:30pm AEST. The stock is up 263% over the last 12 months.
The company said the US Coast Guard has exercised options with Austal USA approving the long lead time materials for its fourth, fifth and sixth OPCs.
Funds have also been provided for logistics supply items for two OPCs.
The context: The original OPC contract was awarded to Austal USA in June 2022 for detail design and construction of up to 11 OPCs, with a potential value of USD3.3 billion.
To date, two of 11 OPCs in the contract have been awarded to Austal USA, as well as long lead time materials for a third.
The 110-metre vessels are designed to perform a range of offshore missions including law enforcement, drug and migrant interdiction, and search and rescue.
What they said: "These early awards reflect the strong partnership that has quickly developed between the Coast Guard and Austal USA teams, and provide an important sign of intent for OPCs 3-6," said Austal CEO Paddy Gregg.
The source: ASX
