Austal posts record Australasia result as USA losses drive full-year statutory loss
In its FY2026 full year results presentation delivered on 31 August 2026, Austal Limited (ASX: ASB) outlined a year of sharp contrasts, with group revenue climbing 11% to $2.03bn and the order book rising 27% to $16.5bn, even as the group recorded a statutory net loss after tax of $53.6m (FY25: $89.7m profit) and an EBIT loss of $125.2m.
Management attributed the loss to onerous contracts within Austal USA, while Austal Australasia delivered what the company described as a record result. The presentation also detailed two headline strategic developments: the appointment under the Strategic Shipbuilding Agreement (SSA), and an indicative proposal from Hanwha to acquire Austal USA at an enterprise value of US$1.05 – 1.20 billion.
Net cash ended the period at $186.3m, with earnings per share of (12.7cps).
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FY26 group financials at a glance
The full-year scorecard reflects a record Australasia performance offset by USA contract provisions, producing a group-level statutory loss despite top-line growth.
| Metric | FY26 | FY25 | Change |
|---|---|---|---|
| Revenue | $2,029.0m | $1,823.3m | +11.3% |
| EBIT | ($125.2m) | $113.4m | (210.5)% |
| NPAT | ($53.6m) | $89.7m | (159.7)% |
| EPS | (12.7cps) | 23.6cps | −36.4cps |
| Net cash | $186.3m | $453.1m | (59)% |
Management noted that FY25 earnings and cash benefited from a one-off US$350m MMF3 facility construction incentive that was not repeated in FY26, an important factor behind the year-on-year swing in both cash and reported profit.
A tale of two regions — record Australasia, USA under pressure
The presentation framed the year’s central story as a record Australasian performance offsetting significant provisioning within the USA business. The two segments moved in opposite directions.
Austal Australasia delivers a record year
Management described the Australasian result as exceptional, driven by the commencement of the SSA. Segment revenue rose +49% on FY25 to $650.7m, generating segment EBIT of $85.3m at a 13.1% EBIT margin.
Shipbuilding revenue nearly doubled to $447.9m (from $249m in FY25), while support revenue reached $202.7m. The company also reported a record Australasian order book with orderbook longevity exceeding 10 years.
Key drivers of the Australasian performance included:
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SSA signed, alongside the commencement of the Landing Craft Medium (LC-M) and Landing Craft Heavy (LC-H) programmes
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Record segment EBIT, reported as 137% higher than the previous best
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Growth across both shipbuilding and support activities
Austal USA weighed down by onerous contracts
Austal USA segment EBIT swung to ($202.8m), with shipbuilding EBIT of ($225.0m) driven by onerous contract provisions. Segment revenue eased slightly to $1,382.6m as support revenue declined, with ships deployed for longer periods due to ongoing conflict.
The presentation noted that accelerated contractual relief had been reassessed on programmes, with recovery assumed for the future, framed as cleansing the position ahead of Hanwha due diligence. On the operational side, submarine module production is ramping, with MMF3 Phase 1 open and 13 modules in production. The full facility is targeted for completion in December 2026.
Separately, Austal USA appointed Eugene Miller as permanent Austal USA President in May 2026, bringing 22 years of U.S. naval shipbuilding experience to the role as the business navigates contract provisions and targets a return to profitability.
The Hanwha proposal — what investors need to know
The presentation treated the potential divestment of Austal USA as a distinct, high-materiality development. Austal disclosed that it has received an indicative, non-binding and conditional offer from Hanwha Defence USA, Inc. to acquire the business entities and operations of Austal USA.
The indicative enterprise value is US$1.05 – 1.20 billion on a cash and debt-free basis.
The Austal Board and its advisers have determined that it merits further evaluation, approving Hanwha to undertake due diligence.
The proposal remains at the due-diligence stage. No binding agreement, agreed price, or completion has been confirmed.
Understanding the order book — why $16.5bn matters
For a defence prime contractor, an order book (including options) represents contracted and optioned future work. For shipbuilders, these programmes typically span multiple years, providing revenue visibility across a decade or more. This is why a growing backlog is closely watched by investors: it underpins forward revenue, supports high facility utilisation, and signals the scale of work ahead.
The two regions carry markedly different backlogs. The Australasian order book grew from approximately $0.7bn in FY25 to $5.6bn in FY26, while the USA backlog stood at approximately $10.9bn. Management pointed to this step change in Australasia as the basis for expected multi-year revenue growth.
The Landing Craft Heavy contract, signed for $4 billion with the Commonwealth Department of Defence, underpins the bulk of that Australasian orderbook growth and extends contracted work through to 2038, providing more than a decade of forward revenue visibility from a single programme.
Key Australasian defence programmes and their status include:
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Landing Craft Medium (LC-M) — 18 vessels forecast, commenced FY26
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Landing Craft Heavy (LC-H) — 8 vessels forecast, commenced FY26
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Evolved Cape Class Patrol Boat (ECCPB) — ongoing, with 6 vessels plus 5 optional vessels
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General Purpose Frigate (GPF) — 8 vessels, subject to ongoing discussions and negotiation (with MHI Mogami-class discussions noted)
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Large Optionally Crewed Vessel (LOSV) — up to 6 vessels, subject to ongoing discussions and negotiation
The GPF and LOSV programmes are not confirmed contracts; the presentation flagged their timing and, in the case of LOSV, vessel numbers as subject to ongoing discussions and negotiation.
Henderson Defence Precinct and growth catalysts
Management highlighted a strategic infrastructure milestone as a key forward-looking catalyst. On 24 August 2026, the Australian and Western Australian Governments announced the selected site for the Henderson Defence Precinct, described as a key milestone for continuous naval shipbuilding and sustainment in WA.
The precinct is backed by an initial $12bn Federal funding commitment and is expected to support around 10,000 direct WA jobs over the next two decades. It is intended to support future frigates, Army landing craft and Australia’s future conventionally armed, nuclear-powered submarines under AUKUS. The programme now moves to concept design.
Defence Minister Richard Marles
“a major step towards establishing a world-class sovereign shipbuilding and sustainment hub in Western Australia”
Cash, capex and the road ahead
Net cash reduced to $186.3m, with cash and cash equivalents of $311.9m (from $583.9m). Management framed the reduction as reflecting heavy investment in capacity rather than a deterioration in the underlying business.
The key driver was enhancing capex of $321m, primarily directed at MMF3, where total investment stands at US$450m. Property, plant and equipment rose 22.9% to $1,439.1m. Operating cashflow was $62.5m, down from $406.3m in FY25, which had included the US$350m MMF3 construction incentive.
Management’s forward outlook pointed to several factors:
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Strong tailwinds from increasing defence expenditure
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Australasia growth from the ramp-up of LC-M and LC-H programmes
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Austal USA targeting resolution of contractual issues and a return to profitability
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Expansion of submarine modular manufacturing capacity, with MMF3 completion targeted for December 2026
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Through-life support and sustainment targeting A$500m in revenue by FY27
The presentation closed on Austal’s strategic positioning, with a $16.5bn order book, the SSA appointment and defence spending tailwinds cited as underpinning management’s positive outlook. The Hanwha due-diligence process remains a key event for investors to watch.
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