Government-backed shipbuilder Austal Ltd (ASX:ASB) has made top gainer status on Tuesday climbing more than +16% despite posting a $175M earnings loss under its US arm – the same arm now a subject of a fresh $1.05B takeover proposal from South Korea shipbuilding giant Hanwha.
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While the company flagged unaudited earnings expectations (before tax) of $62M from the Australasia business, its steeper loss in the US was shrugged off by investors, perhaps in light of renewed interest from Hanwha (via the latter’s own US arm.)
Hanwha tried to acquire Austal outright in 2023 and 2024, but ultimately the proposal didn’t pass a vibes test in Canberra. Now, Hanwha Defence US is trying to buy Austal’s US operations only. Still, in its own right, Austal also wrote on Tuesday it intends to pare back some of the damage of that $175M loss.
“Austal USA has reassessed recoverability of contractual claims after determining it will not receive accelerated contractual relief for certain legacy contracts, resulting in an expected non-cash provision and an Austal USA EBIT loss of approx. $(175) million … Austal USA has commenced the formal contractual process to recover value on these contracts,” the company added.
But it seems more probable renewed interest from Hanwha is behind much enthusiasm on Tuesday among Austal investors; particularly if the US division is struggling and now Hanwha US could potentially turn it around.
Notably, the new takeover proposal would not impact Austal’s Australian operations, nor its shares on the ASX – which Austal framed on Tuesday as being more conducive of protecting Australian shipbuilding sovereignty.
While that hasn’t really got anything to do with publicly listed shares, maybe one can spy between the lines a strategy from Hanwha here to try and keep everybody happy.
Last year, Hanwha bought a 9.9% stake in Austal.
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