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Austal (ASX:ASB) - CEO, David Singleton
CEO, David Singleton
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  • Shipbuilder Austal (ASB) says its operations remain largely unaffected by COVID-19, despite four employees testing positive for the virus
  • Three of Austal’s employees tested positive in Cairns, with a fourth testing positive in Mobile, all of whom are now in self-isolation
  • Due to the essential nature of its defence contracts, the company predicts revenue will still hit at least $1.9 billion in 2020
  • Austal will also uphold its interim dividend
  • Despite the announcement, Austal is currently renegotiating payment terms with its defence clients to strengthen cash flow over the coming months
  • Austal shares have undergone no change today, trading for $2.95 per share

Shipbuilder Austal (ASB) says its operations remain largely unaffected by COVID-19, despite four employees testing positive for the virus.

Three Austal employees tested positive in Cairns, with a fourth testing positive in Mobile. In response, Austal has implemented self-isolation and sanitisation measures.

Despite this development, the company maintained its interim dividend and reaffirmed its 2020 guidance in an announcement on Tuesday.

Austal was quick to point out that its defence contracts with the U.S. and the Australian Defence forces are considered essential activities.

Therefore, the company’s operations will not be significantly disrupted by recent wide-spread government-mandated shutdowns.

With this in mind, the company predicts revenue will still hit at least $1.9 billion in 2020

However, Austal is currently renegotiating payment terms with its defence clients, due to the unpredictable climate surrounding COVID-19. Austal hopes to accelerate some of its clients’ payments to strengthen cash-flow over the coming months.

Austal CEO David Singleton says there is a balance between keeping the company’s employees healthy and keeping them employed.

“We have introduced a range of measures that enable the ongoing construction and maintenance of vessels, in a manner which limits health risks, to the greatest extent possible,” David explained.

“Our robust balance sheet combined with a strong, coronavirus-resilient order book and continued efficient operating performance means Austal has never been in a better position to weather these current challenges,” he said. 

David went on to thank the U.S. Defence and the Australian Government for their willingness to renegotiate the company’s payment terms.

Austal shares have undergone no change today, trading for $2.95 per share at 11:16 am AEST.

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