Key Highlights

  • Revenue rose 11% to A$2.03 billion, but Group EBIT swung to a loss of A$125.2 million.
  • The US segment recorded an EBIT loss of A$202.8 million, including onerous contract provisions.
  • The Australasian division posted record Revenue of A$650.7 million, up 49%, and segment EBIT of A$85.3 million.
  • The defence order book in Australasia rose to about A$5.6 billion, and no Dividend was declared.

What happens to Austal if its American shipyard is sold? That question has dominated the story since the shipbuilder reported a statutory loss for FY26 on 31 August 2026 and then confirmed that more than one party was interested in buying Austal USA. The company (ASX:ASB) operates in this market. The answer is not yet known, but the facts so far show a company whose Australian Business is growing fast while its larger US operation weighs on earnings.

FY26 results

Revenue: A$2.03 billion, up 11% from A$1.82 billion.

Group EBIT: a loss of A$125.2 million, compared with a profit of A$113.4 million.

Statutory net loss: A$53.6 million, compared with a profit of A$89.7 million.

Net cash: A$186.3 million, down from A$453.1 million.

Dividend: none declared, as the company continues to invest in capacity.

The loss was driven by the US business, where provisions on several loss-making contracts were recorded. The USA segment's EBIT was a loss of A$202.8 million, including a shipbuilding EBIT loss of A$225.0 million from onerous contract provisions. The comparison with FY25 is distorted because that year included a one-off US$350 million construction incentive related to the Medium Landing Ship programme (MMF3) that was not repeated.

The Australian side

The Australasian division produced a record result. Revenue was A$650.7 million, up 49%, with segment EBIT of A$85.3 million at a 13.1% margin, which was 137% above the previous best. Shipbuilding revenue rose to A$447.9 million and support revenue was A$202.7 million.

Australasia's defence order book rose to about A$5.6 billion from roughly A$700 million a year earlier, anchored by a A$4 billion Landing Craft Heavy contract running to 2038. Landing Craft Medium and Landing Craft Heavy programmes began in FY26, and the Evolved Cape Class Patrol Boat programme is under way. Chief executive Paddy Gregg said the pipeline offers a path to potentially double Australasian revenue over five years. That is a management ambition rather than guidance.

The US business and the bids

The group order book was about A$16.5 billion including options, with about A$10.9 billion in the US.

In August 2026 South Korea's Hanwha Defence USA made a non-binding, conditional proposal for Austal USA at an indicative Enterprise value of US$1.05 to US$1.2 billion, cash and Debt free. The board approved due diligence. On 9 September 2026 Austal confirmed a second, non-binding approach from a syndicate led by Wildcat Infrastructure at US$1.25 to US$1.35 billion, which Wildcat proposed to run as an independent business under the Austal brand, subject to Due Diligence and other conditions. Austal said its board and advisers would consider it.

Offers are non-binding, there is no agreed price, and any sale would remove the US business from the group and change what shareholders own.

Sector and competitive position

Austal builds naval and commercial vessels for Australian and US defence customers, so its fortunes track government spending priorities, particularly shipbuilding and sustainment programmes. US shipyard capacity and workforce challenges have been an industry-wide issue, and Austal is making substantial capacity investments, with enhancing Capital Expenditure of A$321 million in FY26. In Australia it is a major participant in the government's naval shipbuilding programme. The company is targeting about A$500 million of support and sustainment revenue in FY27.

Outlook

Austal said it expects a return to profitability in FY27, which is a company expectation that depends on the US contracts stabilising. A group reporting a loss is difficult to value with earnings-based measures, so investors will tend to focus on the potential sale value of the US unit, order book and the remaining net cash.

Risks and what to monitor

Transaction outcome: whether any binding offer emerges, at what price, and whether shareholders approve it.

US contract performance: further provisions or delays on loss-making programmes, with Medium Landing Ship completion targeted for December 2026.

Cash: net cash more than halved, and no dividend was paid.

Unconfirmed Australian programmes: the frigate and optionally crewed vessel programmes are not yet contracted.

Government and national security considerations on foreign ownership, which were the subject of commentary but are not settled.

What to watch next

Key items are any ASX announcement of a binding proposal, the outcome of Hanwha's extended due diligence, the Wildcat discussions, the annual general meeting, and the first-half FY27 result. Investors should rely on Austal's ASX announcements for developments, since they can change quickly.

The takeaway

Austal has two stories running at once: a growing Australian defence Franchise with a much larger order book, and a US operation that produced losses and now attracts competing buyers.