Austal parts ways with US boss after sinking to loss

afr.com:

Austal’s head of its US operations has left the business after it lost $171 million on one of its US Navy contracts, tipping the shipbuilder to an annual loss.

Austal chief executive Paddy Gregg. 

The big blowout on its US Navy contract was foreshadowed in July. Austal offered no explanation for the resignation of Rusty Murdaugh, who was president of Austal USA and in charge of the Alabama shipyards where it builds vessels for its defence client.

Austal chief executive Paddy Gregg said Mr Murdaugh had done a good job filling out the order book immediately after a period of “considerable uncertainty”, when three Austal employees were accused by the Securities and Exchange Commission of fraud from 2013 to 2016, but the focus had shifted to delivering vessels on budget.

Mr Gregg said: “Now is the time to find the right person that is going to deliver all of that work. Strategy and business winning are different to execution. We’re just trying to do the best thing we possibly can to make sure that the workforce here are delivering ships for our customers.”

Austal slumped to a 2023 net loss of $13.8 million from a profit of $79.6 million. Revenue grew 11 per cent to $1.58 billion, and earnings before interest and tax was recorded as a $4.8 million loss from EBIT of $120.7 million in 2021-22.

The Perth-headquartered shipbuilder has been the subject of takeover talk, but it is understood that interest has waned. Austal also has onerous change-of-control provisions.

The Andrew and Nicola Forrest-backed group forecast an increase in revenue of 8 per cent to 10 per cent and underlying EBIT margin guidance of 3 to 4 per cent. Its order book stands at $11.6 billion.

Citi analyst Sam Teeger said Austal’s forecast for 2023-24 implied