Austal USA Secures $3.3 Billion Deal for Eleven Next-Generation USCG Offshore Patrol Cutters
Austal USA has secured a contract with a possible value of US$3.3 billion, aimed at the detailed design and construction of up to 11 Offshore Patrol Cutters (OPC) for the United States Coast Guard (USCG).
The initial vessel has been commissioned by the US Coast Guard, with the option to add 10 more vessels.
Construction is anticipated to start in 2023.
The fabrication of the 110-meter OPCs will occur at Austal USA’s new US$100 million steel shipbuilding facility located in Mobile, Alabama.
Although the OPC contract has been assigned in FY2023, this contract award is expected to positively influence some cost assumptions used to assess Austal’s FY2022 earnings before interest and tax (EBIT). Consequently, Austal anticipates its FY2022 EBIT will exceed the earlier projected $107 million. The Company is not yet ready to determine the extent of the EBIT rise and will notify shareholders as soon as the increased EBIT is calculated.
Austal Limited Chief Executive Officer Paddy Gregg stated that this new contract marks the third steel shipbuilding initiative awarded to Austal USA, highlighting the enhanced capabilities of the shipyard.
“The United States Coast Guard’s new Offshore Patrol Cutters present an exceptional opportunity for Austal USA to showcase the shipyard’s new steel shipbuilding capabilities; founded on years of confirmed construction expertise through the delivery of the LCS and EPF programs for the United States Navy,” Mr. Gregg remarked.
“The Offshore Patrol Cutters are an essential asset in the United States’ homeland security and represent the Coast Guard’s top acquisition program, with the Austal USA team being extremely eager and honored to deliver this significant shipbuilding program for the USA.”
Austal USA President Rusty Murdaugh expressed: “This contract acquisition is a testament to our unwavering investment in our workforce and facilities. We are excited about the prospects this will offer our local community and our remarkable supplier network, as this program will provide our shipbuilding team the stability they need for ongoing growth.”
The Coast Guard’s 110-meter steel OPCs create a capability bridge between the service’s National Security Cutters that operate in the open sea and the smaller, Fast Response Cutters that function closer to the coast. The new OPCs are designed to execute a range of missions including law enforcement, drug and migrant interdiction, and search and rescue operations.
With a range of 10,200 nautical miles at a speed of 14 knots and a 60-day operational endurance, each OPC will be capable of deploying independently, or as part of operational task groups, serving as a mobile command and control hub for rapid response operations such as hurricane management, mass migration occurrences, and other crisis situations. The Cutters will also assist Arctic objectives by regulating and safeguarding emerging commerce and energy exploration in Alaska.
Austal USA will design the OPC utilizing its established ship manufacturing techniques and innovative methods that integrate lean manufacturing principles, modular construction, and moving assembly lines in the company’s advanced enclosed steel production facility.
With the grant of the OPC, Austal USA is actively engaged in a variety of shipbuilding programs for the United States Navy and United States Coast Guard; with production ongoing for the aluminum Independence-variant Littoral Combat Ship (LCS) and Spearhead-class Expeditionary Fast Transport (T-EPF) programs as well as the steel-hulled Navajo-class Towing, Salvage and Rescue (T-ATS) vessels and Auxiliary Floating Drydock Medium, contracted for the United States Navy.
This ASX announcement has been approved and authorized for publication by Paddy Gregg, Chief Executive Officer of Austal Limited.
