Surely if shareholders are wondering what the hell the announcement means it is anything but clear. It is poor communication from ASB.
The wording of the release is 'This contract award will fund Austal USA to enhance its existing infrastructure by designing,constructing and outfitting a new module fabrication and outfitting facility at its Mobile shipyard....'. It also says construction will be in 2026 so this is a new build, not funding something build on spec.
Good question on CAPEX. My understanding was analysts were wondering if ASB would need to raise to fund CAPEX, but ASB seemed confident they would not need to. This announcement may explain why.
A$670m is a lot of money to build a shed, so there must be more to this than is evident from the announcement.
I agree it is encouraging ASB is positioned to supply submarine components, but the history of these things is that Australian businesses get scraps from these deals and that are mostly politics.
ASB Price at posting:
$2.45 Sentiment: Hold Disclosure: Held
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