The Austal Limited (ASX: ASB) share price finished in the green today following a positive update from the shipbuilder.
At the close of trading, Austal shares ended the day up 3.33% to $2.48. In comparison, the All Ordinaries Index (ASX: XAO) closed down 0.61% to 7,849.6 points.
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What did Austal announce?
Investors were buying Austal shares after the company announced it has secured another contract from the United States Navy.
According to its release, Austal advised it has been awarded its second Sustainment Execution Contract (SEC) for the east coast of the United States.
Under the deal, Austal will be able to bid for repair, maintenance and modernisation work as a prime contractor. This is for all Littoral Combat Ships (LCS) homeported in Mayport, Florida.
The SEC-East contract follows the company's recent award of the SEC-West contract in early August. The latter is for the same type of work on LCS on the US west coast, homeported in San Diego, California.
Furthermore, the SEC-East contract is expected to complement Austal's service centres in Mobile, Alabama and in Singapore. This will effectively give the company reach to service the entire United States Navy LCS fleet worldwide.
Austal CEO Paddy Gregg touched on the milestone achievement, saying:
With the SEC-East and SEC-West contract awards, Austal USA is now able to support both the Independence and steel-hulled Freedom-class Littoral Combat Ships, on both the West and East coasts of the United States.
Both the SEC East and West contracts come on top of Austal USA's recent expansion of sustainment capability in Mobile, which includes the recent additional waterfront property, covered vessel repairs facilities and a 20,000-tonne floating dry dock.
Austal share price summary
It has been a tough 12 months for Austal shareholders, watching the company's shares fall by more than 24%. The Austal share price hasn't fared much better year-to-date, also down almost 8%.
On valuation grounds, Austal has a market capitalisation of roughly $884.5 million with approximately 359 million shares on its books.
