Austal Limited (ASX: ASB) shares are edging higher in early morning trade. At the time of writing, the Austal share price is trading 3.12% higher at $2.31. This comes as the shipbuilding company announced it has been awarded a contract with the United States Navy.
Let's take a closer look at the company's latest news.
Austal partnership with US Navy
Investors are pushing the Austal share price higher on Monday after the company advised it has won a contract to design a new Navajo-class Towing, Salvage and Rescue Ship (T-ATS) for the US Navy.
Valued at $3.8 million, the deal will see Austal prepare a functional design for the 80-metre monohull vessel. This will include an array of multi-mission capabilities to support towing, salvage, search and rescue, oil spill response, humanitarian assistance and surveillance activities. In addition, the T-ATS may possess cyber, electronic warfare, and decoy and surveillance systems.
This is Austal's first contract to develop steel ships for the US Navy. Shareholders will likely be hopeful the contract will help boost Austal shares back towards their 2019 highs, which were almost double today's price.
Austal CEO Paddy Gregg commented:
In June 2020, Austal announced our intention to invest approximately US$100 million in steel shipbuilding capability at Mobile, Alabama, co-funded by the United States Government. In March 2021, the Austal USA team broke ground on new steel shipbuilding facilities and now, we have received the first contract to design the steel-hulled Navajo-class T-ATS ships for the United States Navy.
Austal USA is now well on the path to delivering steel ships for the United States Navy and we couldn't be prouder of the hardworking team in Mobile, Alabama; now the 5th largest shipyard in the United States.
Austal share price summary
It has been a disappointing 12 months for the Austal share price, which has fallen by more than 30%. Year to date, the company's shares haven't fared much better and are down by around 14% since the start of 2021.
Austal has a market capitalisation of roughly $825 million, ranking it the 331st largest company on the ASX.
