Austal’s EBIT Upgrade Signals Strength but Audit Could Shift Final Numbers
Austal Limited has raised its FY2025 EBIT guidance from $80 million to at least $100 million, driven by robust manufacturing performance and a key submarine modules contract with General Dynamics Electric Boat.
- FY2025 EBIT guidance upgraded to not less than A$100 million
- Strong manufacturing performance underpins earnings upgrade
- EBIT contribution from submarine modules contract with General Dynamics Electric Boat
- Guidance remains subject to final audit completion
- Austal continues to solidify its position as a global defence shipbuilder
Austal Raises Earnings Expectations
Austal Limited (ASX, ASB), Australia's leading global shipbuilder and defence prime contractor, has announced an upgrade to its unaudited FY2025 Earnings Before Interest and Tax (EBIT) guidance. The company now expects EBIT to be not less than A$100 million, up from the previous guidance of at least A$80 million. This positive revision reflects stronger-than-anticipated operational performance and contract execution.
Driving Factors Behind the Upgrade
The key driver behind this earnings upgrade is Austal’s robust manufacturing business, particularly its performance at the manufacturing facility responsible for submarine modules. The company highlighted the submarine modules (MMF3) contract with General Dynamics Electric Boat, announced in September 2024, as a significant contributor to the improved EBIT outlook. This contract underscores Austal’s expanding footprint in the highly specialised defence shipbuilding sector, especially in submarine construction.
Context and Market Position
With over 35 years of experience and more than 350 vessels built for 59 operators worldwide, Austal has established itself as a dominant player in aluminium and steel shipbuilding. The company operates shipyards and service centres across Australia, the United States, Vietnam, and the Philippines, delivering a diverse range of commercial and defence vessels. This latest guidance upgrade reinforces Austal’s reputation as Australia’s largest defence exporter and a key contractor for the US Navy.
Looking Ahead
While the updated EBIT guidance is unaudited and subject to the completion of the annual audit, it signals strong momentum for Austal as it continues to secure and execute complex defence contracts. CEO Paddy Gregg’s approval of this announcement reflects confidence in the company’s operational capabilities and strategic direction. Investors will be watching closely for the final audited results and further developments on the submarine modules contract.
Bottom Line?
Austal’s upgraded guidance sets a confident tone, but the final audit will be the true test of its FY2025 performance.
Questions in the middle?
- How will the submarine modules contract impact Austal’s long-term revenue streams?
- What risks remain before the final audit confirms the upgraded EBIT guidance?
- Could Austal’s manufacturing strength lead to further contract wins in the defence sector?