DECEMBER 16, 2022
Austal USA Expands Ship Maintenance and Repair Capabilities with San Diego Lease Finalized
Austal Limited (Austal) (ASX: ASB) is pleased to announce that Austal USA has completed the purchase of a long-term lease for the Marine Group Boat Works facility in the Port of San Diego, USA , allowing the continued growth of the company as a service and support business.
The installation lease has a term of 27 years. Austal estimates that the purchase of the yard and construction of a floating dock will cost a total of around US $ 80 million (around AU $ 112.5 million), to be funded from the company’s cash reserves.
Combined with the company’s recent inclusion in the U.S. Navy Sustainment Execution Contract (SEC West), Austal’s new, long-term presence in San Diego is a critical catalyst for securing new contracts for maintenance of the navy, coast guard and military maritime transport command.
âNow we will have Austal employees in an Austal shipyard supporting Austal ships and other vessels, so we can take full advantage of our inclusion in SEC West,â said CEO of ‘Austal, Paddy Gregg.
âThe strategic purchase of West Coast shipyard capacity will increase our revenues, increase our margin and improve our operational flexibility. It will also complement the maintenance work that our Mobile shipyard performs.
The newly leased yard, which is part of the Unified Port District of San Diego (owned and controlled by the Port of San Diego) is immediately adjacent to the US Naval Base San Diego, occupies five acres and includes a pier capable of accommodating ships up to 80 meters long, a travel lift (with a lifting capacity of up to 300 tonnes) as well as machine shops and a warehouse.
Austal will establish a full-service ship repair capability, maintaining and modernizing a wide variety of ships, including small surface combatants and autonomous ships. Services will include technical and material support, surface work and dry docking.
Austal is commissioning construction of a new floating dock, which will support frigates and small surface combatants, including the US Navy’s Independence and Freedom class Littoral combat ships.
“Our support business is gaining tremendous momentum,” said Mr. Gregg.
âWhen you combine our existing maintenance work in Mobile with San Diego, with the inclusion of the SEC East and West contracts and with our recent contract for US $ 72.5-216 million1 to perform maintenance on coastal combat vessels (LCS) deployed in the Western Pacific and Indian Ocean, this demonstrates the growing importance of our support activity and the future opportunities it generates for Austal. ”
This ASX announcement has been approved and cleared for publication by Paddy Gregg, CEO of Austal Limited
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Cameron Morse, FTI Council
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