Does Austal Limited continue to have efficient operating performance?

Team Veye | 09 Apr 2020 ASX - ASB
Does Austal Limited continue to have efficient operating performance?

Austal Limited (ASX: ASB)

Business Update and Response to Covid-19

Austal Limited (Austal) (ASX: ASB) on 7 April 2020 provided the following update on the Company’s operations and performance, as well as health and wellbeing measures being undertaken in response to the COVID-19 pandemic.

(Chart source: TradingView)

Highlights 

  • Operational and financial performance to date largely unaffected by COVID-19. 
  • FY2020 earnings guidance of no less than $110 million EBIT maintained.
  • Payment of unfranked 3 cps interim dividend (totalling $10.6 million) to proceed as planned. 
  • Austal working with defence customers to accelerate payment terms that will maintain predictable cashflow for Austal and its supplier base.

 

Austal Chief Executive Officer David Singleton said that Austal had continued to strive for the right balance between keeping its people healthy and keeping them employed. It has introduced a range of measures that enable the ongoing construction and maintenance of vessels, in a manner which limits health risks, to the greatest extent possible. (Data Source – Company Reports)

 

Veye’s Take

Austal’s has a robust balance sheet combined with a strong, coronavirus-resilient order book. Its continued efficient operating performance indicates that Austal has never been in a better position to weather these current challenges. The Company maintains its FY2020 guidance of Group EBIT of no less than $110 million. It is expecting Group revenue of no less than $1.9 billion with US shipbuilding EBIT margin of 7.5 – 8.5 percent. Austal has also reaffirmed the payment of the 3 cps interim dividend (totalling $10.6 million). Austal has a net cash position of $152.4 million as of 31 December 2019. The stock underwent some correction right up to its support level. It is now moving in an ascending triangle where it is likely to meet strong resistance at $3.60. Upon crossing this it can have the potential of touching previous highs again. Veye maintains a "Hold" on “Austal Limited” at the current price of $3.11

Disclaimer

Veye Pty Ltd (ABN 58 623 120 865) authorised representative (AR No. 001261006) of Vested Equities Pty Ltd which holds an Australian Financial Services License (AFSL No. 478987). Veye is authorised to share only generic financial views through its website, reports and newsletters without taking into consideration your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure the accuracy of the content and that the information is gathered and processed from reliable resources, it is recommended you seek professional advice from your financial advisor or stockbroker before acting on any of our recommendations. Veye Pty Ltd advises it’s users to pursue investing as a long-term goal. Stocks are subject to real time changes therefore all the information we share represents our views at the date of publishing and we request our readers not to interpret our reports as direct recommendations. Past performance is no indication of potential future performance. The securities and financial products we study and share information on in Veye Reports may have a product disclosure statement or other offer document associated with them. You should obtain a copy of these documents before making any decision about acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Veye Pty Ltd confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report (as mentioned on the website www.veye.com.au).