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Revenue Growth: Increased by 34.4% across the group. Order Book: At an all-time high of $17.7 billion. USA Shipbuilding Revenue: Increased by 29%. USA Support Revenue: Increased by 11%. Australasia Shipbuilding Revenue: Increased by 83%. Australasia Support Revenue: Improved by 27%. EBIT: $60 million for the half year, with a growth of 41%. Australasia Shipbuilding Earnings Growth: Over 600%. Australia Support Business Earnings Growth: Over 400%. Support Segment EBIT Margin: 17.9%. Net Assets: Over $1.3 billion. Cash Balance: $371.6 million at the close of 2025. Trade Receivables: Higher by 43% at $211 million. Cash Flow from Operations: Negative $63 million.

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Release Date: February 22, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Austal Ltd (AUTLF) reported double-digit growth across all key financial performance metrics, including revenue, earnings, and impact. The company's order book reached an all-time high of $17.7 billion, providing a strong foundation for future growth. Australasia shipbuilding experienced significant growth, with an increase of 83%, driven by new contracts and strategic agreements. The company's balance sheet remains stable with a robust cash balance of $371.6 million, supporting ongoing capital investments. Austal Ltd (AUTLF) is capitalizing on increasing defense expenditure trends in both the United States and Australia, which is expected to drive positive momentum.

Negative Points

The company's auditors issued a qualification in their opinion due to insufficient evidence regarding judgments on specific US contracts. US shipbuilding margins were compressed due to the wind-down of certain programs and ongoing onerous contracts. Cash flow from operations was negative $63 million, impacted by onerous contracts and delayed customer payments. The trade receivable balance increased by 43%, reflecting growth in production but also highlighting collection challenges. The company's overall cash position decreased by $212 million, primarily due to significant capital expenditure on US infrastructure projects.

Q & A Highlights

Q: Margins are slightly lower on a half-on-half basis. Do you expect current margins to continue into the second half, or will there be an improvement? A: Patrick Gregg, CEO: The US shipbuilding business margins were slightly lower due to specific programs, but as these stabilize, we expect margins to improve. The Australian business is performing well, and new contracts are promising for future earnings growth.

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Q: Do you expect the Australian business growth trend to continue, and what about the US? A: Patrick Gregg, CEO: Yes, we expect both the Australian and US businesses to continue growing. As programs come online, we anticipate reaching a 7% to 10% EBIT range, typical for defense shipbuilding.

Q: Have the $105 million of milestone payments that didn't come through in the first half been received now? A: Christian Johnstone, CFO: Yes, those payments have been received, which affected the trade receivable balance at December. This will positively impact the earnings profile from operating segments.

Q: Can you provide more details on the timing and ramp-up of the landing craft programs? A: Patrick Gregg, CEO: Both the landing craft medium and heavy programs will start metal cutting in the last quarter of this year. They will ramp up to steady-state production over about 18 months, aiming for efficient program delivery.

Q: What EBIT margin should we expect from the $6.7 million of submodule revenue? A: Christian Johnstone, CFO: The $6.7 million is related to the MMF3 program, which is a USD450 million contract with zero cost, meaning revenue recognized will drop directly to earnings. The submarine modules in the US are also very profitable, offsetting some margin compression from other contracts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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