Half Year Results February 2005 Mr John Rothwell, AO Executive Chairman
Company Overview Austal Limited Austal Ships & Austal Image Revenue : ~ $250m pa Austal USA Revenue :$30m $250m pa Austal JV Revenue : $50m $300m pa? Mature Business Commercial Ferries Evolving Business Littoral Combat Ship Commercial Ferries Opportunities Patrol Boats (Mid-East/Asia) Amphibious Ship Programme Australian Submarine Corp
Financial Summary Half-year end Dec 03 (A$m) Half-year end June 04 (A$m) Half-year end Dec 04 (A$m) Operating revenue 153.0 157.1 162.8 Net profit after tax & OEI 3.0 17.1 21.6 EPS (cents/share) 1.57 8.83 11.24
Improvement continues Profit after tax and OEI (A$m) Half-year end Half-year end Half-year end Half-year end June 03 Dec 03 June 04 Dec 04 Yachts (7.7) (3.7) 0.0 0.0 Austal USA (5.4) (1.3) 0.3 (0.8) Austal Ships & Austal Image 7.9 8.0 16.8 22.4 Major contracts in Australia performing in line with expectations Austal USA continuing to build workforce at minimal cost to earnings No Yacht earnings in the forseeable future
Highlights of the first half Launch of 127 metre trimaran - Speed, manoeuvrability and passenger comfort ahead of expectations - Delivery due end March 2005 following improvement to steering system Delivery of 10 x 35 metre patrol vessels completed for Yemen First Armidale class patrol vessel - launched January 2005
127 metre trimaran ferry New design technology for large vehicle passenger ferries and basis for US Navy LCS programme.
Yemen patrol boats delivered
Armidale Patrol Vessel Launch of HMAS Armidale, the first of the 12 (possibly 14) patrol boats for the Royal Australian Navy.
Full year financial outlook 2H 2005 unlikely to be as strong as the first which was positively influenced by; - High levels of production activity - Completion of Yemen contract - Combination of unrelated factors (share plan, timing of main engine deliveries, improved workers compensation outcomes, R&D tax concession etc)
Outlook 1. Solid forward order position remains as at 31 December 2004, $386 million to be completed across 2005, 2006 and 2007 financial years 2. Hawaii Superferry project receives Title XI debt and equity commitments. Financial closure due mid-year 2005. Adds approx $200m to order book when finalised 3. Potential for a further 2 x Armidale patrol vessels which have been announced by the Prime Minister but not yet contracted 4. LCS design programme on schedule. Exercise of option for initial vessel by US Department of Defense due October 2005. 5. Over $ 500 million in orders to be confirmed from (2) to (4) above
Opportunity to build on established revenue base Actual From current contracted orders Revenue (A$m) 300 200 100 Yachts Commercial Defence 0 2003 2004 2005 2006 2007 Financial Year
Current Production Commercial Customer Yard % complete (at 31 Dec)* 105m vehicle-passenger ferry Hawaii Superferry USA 0% 85m vehicle-passenger ferry Hellas Flying Dolphins Aust 43% 67m vehicle-passenger ferry Virtu Ferries Aust 17% 2 x 45m passenger ferries L Express des Iles Aust 4% 37m private research vessel Private Owner Aust 44% Defence Office of Naval Research vessel US Navy USA 92% 12 x 56m patrol boats Royal Australian Navy Aust 12% * % revenue/profit completion
Core Strengths of Austal Group Research, Development & Design skills - Over 150 naval architects, engineers and designers Customisation of vessels to end user requirements - Customer determines the requirement, not the shipbuilder Ability of production workforce to solve practical problems and meet delivery deadlines Short delivery times through relatively large design and production workforce Physical facilities, financial capabilities and after sales support
Challenges Ahead Recruitment of skilled employees Succession planning of management team Building up the US workforce to undertake the LCS and HSF projects Partnering arrangements for Amphibious Ship project for the Royal Australian Navy
Growth Opportunities Austal USA - Littoral Combat Ship - Hawaii Superferry Amphibious Ships - Royal Australian Navy
Austal USA Commencement of work on initial 105 metre vessel for Hawaii Superferry Commencement of US$18m shipyard expansion - Complete by Sept 2005 - Funding assistance from State of Alabama, City of Mobile, General Dynamics - Approximately US$2m sourced internally
Littoral Combat Ship
Littoral Combat Ship - Update Littoral Combat Ship (USA) - Austal is ship designer and builder in General Dynamics (GD) consortium. - Austal share approximately US$100m per vessel. GD/Austal proposal based on Austal 127 metre trimaran design. - May 2004 GD/Austal awarded 1 of 2 contracts (other being Lockheed Martin) for final vessel design. Includes options for 2 initial vessels from each consortium. - GD/Austal options due for exercise in October 2004 - US Navy identified need for 9 LCS vessels by 2009 - Reported total LCS vessels required up to 57 over 15 years
Littoral Combat Ship - Update The LCS project has been described by Admiral Vern Clark, Chief of Naval Operations, US Navy as; Our most transformational effort and number one budget priority, the Littoral Combat Ship, will be the first navy ship to separate capability from hull form and provide a robust, affordable, focused-mission ship.
Amphibious Ship Program
Amphibious Ships Partnered with Raytheon December 2005 - ship design chosen April 2006 - tender for 2 x vessels released September 2006 successful shipbuilder announced Delivery of vessels in 2010 and 2014 Approx $1.5b in revenue to Austal if successful Potential for Austal involvement as the builder in a consortium