Shipbuilding company Austal Limited (ASX:ASB) has announced that it will be cutting 300 jobs at its Henderson ship yard located south of Perth by early 2016. As a federal government contract to build eight Cape Class Patrol Boats nears completion, the company is seeking to reduce its labour force. Austal is also completing the construction of two High Speed Support Vessels for Oman later in the year. Austal president Graham Backhouse said the layoffs were required and expected due to the completion of the government contract. “The contract required delivery of a large number of vessels in a short time-frame and we needed to bulk up to meet that demand. Now that demand is close to finishing, we need to normalise our employee numbers,” he said.
The Australian shipbuilding company has around $2.6bn in orders, including 20 Littoral Combat Ships for the US Navy. Austal said that construction of the boats requested by the Australian Customs and Border Protection were 80 per cent done and in the “final stages” of completion. The company expects to deliver the ships in the third quarter of this year. The layoffs will cut 40 non-permanent and redundant employees while cutting an additional 260 excess employees at its Henderson ship yard. For the full 2014/15 year, Austal is projecting revenue of $1.2bn. Shares of ASB are up 1c, or .57 per cent, at $1.77 per share near the end of trading hours on Wednesday. ASB has advanced 85.8 per cent in the last 12 months and 17.28 per cent so far this year.
Author: Simon Herrmann
Apr 02, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.