Austal starts production on $5B defence contracts
Key points
- Austal has started production on two landing craft projects for the Australian Army worth a combined $5 billion.
- Austal shares settled up at $4.61 following the announcement.
- The projects aim to expand sovereign naval manufacturing and deliver littoral vessels to the Australian Defence Force.
Austal (ASX:ASB) has cut first steel on landing craft projects for the Australian Army, valued at $5 billion.
The construction milestone follows an extensive design phase and delivers the first vessel built since Canberra awarded the programmes.
"The start of production on the LCM and LCH projects represents a major step forward in the delivery of littoral capability to Australia's defence force and reinforces Austal's ability to deliver complex naval platforms through its world-class shipbuilding facilities in Western Australia," said Austal CEO Paddy Gregg.
The work covers eight Landing Craft Heavy vessels valued at approximately $4 billion and 18 Landing Craft Medium vessels valued at $1.03 billion.
Following the announcement, the Austal share price was up at $4.61.
The company engaged Western Australia partners HD Plasma and Pacific Industrial Company to perform the initial steel cuts.
Austal stated that the builds leverage existing shipbuilding programmes to strengthen sovereign defence industrial capacity and support skilled jobs.
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