* Austal sees foreign interest in new warships
* Company sees good prospects given low cost of ships
By Andrea Shalal-Esa
NEW YORK, Dec 1 Australia's Austal Ltd (ASB.AX)
said on Thursday it had orders for new U.S. warships valued at
about $900 million a year through 2015 and was upbeat about
future sales to the United States and other countries, despite
a downturn in the U.S. defense budget.
"We think that we're really just scratching the surface in
terms of the potential that we've got," Austal Chief Financial
Officer Richard Simons told an investor conference hosted by
Credit Suisse and Aviation Week.
Austal is one of two builders of the U.S. Navy's new
Littoral Combat Ship (LCS), a fast and agile coastal warship,
and is the only supplier of the Navy's new Joint High Speed
Vessel. Austal's LCS model is an aluminum trimarin, while
Lockheed Martin Corp (LMT.N) builds the other LCS model, a more
traditional steel monohull design.
Navy shipbuilding plans call for the two new ships to
account for 25 percent of the all U.S. Navy vessels by 2040.
Simons said Austal planned to expand its U.S. workforce
from about 2,500 to around 4,000 by 2013 as it continues work
on the eight LCS and seven JHSV ships already under contract.
The Navy has already committed to buying 10 each of the two
warships and eventually expects to buy a total of 55 LCS ships
and 44 JHSVs, which are based on a commercial high speed ferry.
The Navy is counting on the new ships to help meet its goal of
growing the naval fleet to 313 ships from around 286 now.
Simons said he was not too worried the Pentagon would back
off its plans to buy dozens more of the lighter warships given
their relatively lower cost compared with far more expensive
submarines and surface destroyers.
Simons said Austal's LCS ships sold for about $380 million,
while the JHSV ships went for about $180 million. Submarines
and destroyers cost billions of dollars.
U.S. Navy orders would peak in 2015, but for now, the
company was "still in ramp up mode," Simons said.
Austal also saw potential sales for servicing and
maintaining its ships for the Navy once they were in service,
which generally amounted to about 10 percent of the sales price
of the ship per year, Simons said.
There was also foreign interest in the Austal LCS model, an
aluminum trimaran, he said. Simons said Saudi Arabian naval
officials had been to the company's shipyard in Mobile,
Alabama, and other countries had also expressed interest. He
declined to name them since foreign military orders are handled
A host of foreign naval officers were given tours when the
first Austal LCS ship, named Independence, made an appearance
at the 20th International Seapower Symposium (ISS) at the US
Naval War College in Newport, Rhode Island last month.
(Reporting by Andrea Shalal-Esa; editing by Andre Grenon)