Austal shares experienced a significant drop on Friday, making it the worst-performing company on the ASX 200. This downturn followed the company’s decision to revise its earnings guidance for the financial year. The revision was prompted by an overstatement related to a US Navy contract.
Austal now anticipates earnings before interest and tax to be approximately $110 million, a considerable decrease from the record $135 million previously projected. The company clarified late Thursday that its US subsidiary had incorrectly double-counted US$17.1 million (AU$24 million) in incentives. These incentives were associated with construction milestones achieved during ship manufacturing for the US Navy in Alabama.
According to Austal, the US$17.1 million had already been fully accounted for in Austal USA’s forecast for the remainder of the program. The shipbuilder acknowledged that this amount had been mistakenly included in the earlier earnings before interest and tax guidance of $135 million. Austal is a global shipbuilder and defence prime contractor designing, constructing and sustaining some of the world’s most advanced naval vessels. Austal shares were down by 22.8 per cent in afternoon trade.
