Shares of Austal Ltd (ASX:ASB) surged to an all-time high on Tuesday after the Australian government formally approved the company as the strategic shipbuilder for its Tier 2 surface combatants.
The approval finalizes a landmark Strategic Shipbuilding Agreement (SSA), which designates Austal’s newly formed subsidiary, Austal Defence Australia, as the prime contractor for key naval programs in Western Australia, the company confirmed.
Following the news, Sydney-listed shares of the shipbuilder jumped as much as 7% to A$6.90, their highest level ever.
Under the SSA, initial projects include the construction of 18 Landing Craft-Medium and 8 Landing Craft-Heavy vessels. The first contract for this work, valued at between A1billionandA1.3 billion, is expected to be finalized in early fiscal year 2026.
Austal CEO Paddy Gregg hailed the agreement as a “defining moment,” emphasizing its importance in strengthening Australia’s sovereign shipbuilding capabilities.
Bolstering investor confidence further, Austal separately announced it was raising its full-year EBIT forecast to at least A100million,asignificantincreasefromitspreviousguidanceofA80 million.
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