Austal slashes financial targets over delays, costs

Austal has lowered its full-year earnings and revenue targets, due to delays in construction as well as expected costs associated with a recent claim against the Henderson-based shipbuilder.

Today, Austal forecast earnings before interest and tax to be between $112 million and $118 million for the full financial year – down from its previous $125 million forecast.

Austal has also reduced its revenue expected for FY21, from about $1.65 billion to $1.55 billion.

Shares in the company have dropped as much as 9 per cent on the news to trade at $2.13, as at 3:15pm AEST.

Austal said the revised forecasts were an outcome of delays experienced on programs and associated costs caused by COVID-related border closures, travel restrictions, and resourcing challenges that were impacting the company's operations in Australia and the Philippines.

It also noted a requirement to make provisions for expected costs associated with civil penalty proceedings commenced by the Australian Securities and Investments Commission in the Federal Court earlier this month.

ASIC has alleged Austal and former chief executive David Singleton did not properly disclose a change in the company’s earnings guidance in 2016.

Austal, now led by Paddy Gregg, acknowledged the proceedings in an ASX announcement on Thursday last week, having said it would consider the documentation provided by ASIC before deciding its next steps.