Update on Austal's and the Government's MMF

From: http://blog.al.com/live/2009/08/austal_completes_first_stage_o.html

"Shipbuilder Austal completes first stage of $170 million module manufacturing facility in Mobile"
Posted by Kaija Wilkinson, Business Reporter August 30, 2009

Joe Rella, president and chief operating officer of Austal USA in Mobile, carries a Frisbee-size disk of aluminum as he walks through the first phase of the shipyard's $170 million module manufacturing facility. Engraved on the disk in plain block letters: John Rothwell, First Plate Cut, MMF...

Starting in October, Austal plans to begin hiring like crazy, Rella said, growing employment from its current 950 or so to about 1,300 people. More military work could move the total jobs near 3,000 within five years, the company has said...

The first quarter of next year, Rella said, the facility will be humming "full bore" on components of the JHSV...

COMING NEXT WEEK
• Taking the pulse of the local shipbuilding industry: Austal was one of five local shipyards to recently receive stimulus grant money. Austal will use its $1.8 million grant to buy an overhead crane for the ship shed where its second littoral combat ship is taking shape...

Drivel about the 102M design...and Superconducting engines

This is in response to a GizMag post elsewhere on the new 102M design. An answer to the problem posed there on the design still being fuel inefficient is superconducting engines:

http://www.amsc.com/products/motorsgenerators/documents/HTSMotorsforHighSpeedShipsASNE.pdf

http://www.spectrum.ieee.org/energy/renewables/winner-superconductors-on-the-high-seas

http://ammtiac.alionscience.com/pdf/WQV9N1_ART04.pdf

Is this the world’s best ship design? The Austal 102 trimaran
August 6, 2009

Shipbuilder Austal first came to Gizmag’s attention in 2005 with the launch of the world’s largest aluminum vessel, the 127 meter Benchijigua Express. The company then started building Littoral Combat Ships (LCS) for the US Navy, based on the same trimaran design. And, now, Austal is launching an even more refined version that improves sea-keeping, passenger comfort and fuel efficiency. This week, Tony Armstrong, Austal’s head of R&D, spoke exclusively to Gizmag about potentially building 20% of the US Navy fleet...Read More

Aha! Validation. That's What I'm Talkin' About!

Gotta love those webbots...

Video of Interview at: http://www.finnewsnetwork.com/archives/finance_news_network12266.html

28 August 2009 - CEO Bob Browning talks about its full year results to June 30 and work with the US Navy.

Bob Browning: Sure, yeah the Hawaii Super Ferry contract really was quite unusual. We were actually helping that company get started and put $30 million of mezzanine debt into the business which then allowed us to contract to build two large catamaran ferries for them. And strategically was important because it allowed us to build our workforce up in Mobile, Alabama which then allowed us to win the Joint High Speed Vessel program which is a very close derivative to that hull form. So while it was unfortunate that Hawaii Super Ferry filed for Chapter 11, it was an unusual thing that we normally wouldn’t do, but it did position us for a much more lucrative contract with the Navy...

Bob Browning: It really was a conscious decision...


Full Interview Below:

TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH AUSTAL LTD (ASX:ASB) CEO, BOB BROWNING

Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for the first time from ship-builder Austal Ltd (ASX:ASB), is CEO Bob Browning. Bob welcome to FNN. You’ve just released your full year results to June 30 with net profit down 82 per cent to $9.2 million on revenue of $500 million, can you explain the result?

Bob Browning: Sure, and it’s important to realise that the impact in our income statement was really some accounting treatments, non-cash write-downs. Our underlying business would have produced about $38.5 million this year which was ahead of analyst expectations but we had the Hawaii Super Ferry write-down and a derivative instrument that we put in place on a multi-ship program that has locked in a big upside for that program going forward from a commercial basis.

Clive Tompkins: Given the substantial hit you took to your bottom-line on the Hawaii Super Ferry contract, are you going to change the way you get paid for similar deals?

Bob Browning: Sure, yeah the Hawaii Super Ferry contract really was quite unusual. We were actually helping that company get started and put $30 million of mezzanine debt into the business which then allowed us to contract to build two large catamaran ferries for them. And strategically was important because it allowed us to build our workforce up in Mobile, Alabama which then allowed us to win the Joint High Speed Vessel program which is a very close derivative to that hull form. So while it was unfortunate that Hawaii Super Ferry filed for Chapter 11, it was an unusual thing that we normally wouldn’t do, but it did position us for a much more lucrative contract with the Navy.

Clive Tompkins: Austal has built a global dominance producing and selling car and passenger fast ferries, but has also been producing a fair number of military vessels, where do you get the bulk of your work from these days?

Bob Browning: Right now it comes primarily from the commercial side of the industry in large catamaran ferries down to passenger ferries. If we fast forward upwards of two years I would expects about two thirds of our income from multi-ship U.S. Navy awards going forward.

Clive Tompkins: And is this a conscious decision, or have you just followed the work flow?

Bob Browning: It really was a conscious decision. We were actually prevented form operating or selling in the United States through some protectionist legislation called the Jones Act, and so the establishment of our facility in Mobile Alabama was designed to allow us to produce ships for that market. We then saw an opportunity with a vessel we produced for a customer in the Canary Islands that we thought an adaptation of that would fit the Navy’s Littoral Combat Ship program and were successful in winning that contract...>>Rest of interview here>>

New word in the lexicon..."Superferried"

From the Honolulu Advertiser yesterday regarding the rail project:

...U.S. Rep. Neil Abercrombie, (D-Hawaii), said today that he is worried about the apparent lack of transparency in the running of the rail project.

Abercrombie said he fears that opponents will have an opportunity to kill the rail project because of the way it is being managed.

"I'm concerned the project is going to be Superferried," Abercrombie said in reference to the demise of the Hawaii Superferry, a high-speed, inter-island shuttle service. The Superferry left the state after a court ruled it had not completed required environmental studies...

We ain't done yet...

Still got the webbots goin'...

From: http://www.marinelog.com/DOCS/NEWSMMIX/2009aug00204.html

August 20, 2009

"Austal full year result hit by Superferry bankruptcy"

Austal Limited has announced a "disappointing" full year result--impacted among other things by the Hawaii Superferry bankruptcy.

In an Australian Stock Exchange announcement, the shipbuilder announced a full year profit after tax of Australian $9.2 million for the financial year ended June 30, 2009. Austal said its 2009 full year result "was adversely affected by two particular events. Firstly as announced earlier this year, an American customer went into bankruptcy, requiring Austal to write-off its receivable owing by this customer. Secondly, in accordance with International Financial Reporting Standards, the time value cost of a hedging instrument that was put in place to lock in a favorable movement in foreign exchange was recognized in the current financial year. This was associated with a multi-ship contract Austal was awarded and the benefit will be realized in future years."

Austal Managing Director Bob Browning commented: "Although this result is disappointing, if it were not for these two events, Austal's earnings this year would have exceeded $38 million. This, in combination with the robust growth in our order book, is a clear indication that Austal is well positioned to deliver stronger shareholder value in the future."...

LCS Bids Submitted to U.S. Navy...LCS-1 vs. LCS-2

From: http://www.defensenews.com/story.php?i=4218071&c=AME&s=SEA

"LCS Bids Submitted to U.S. Navy"
By Christopher P. Cavas
3 Aug 2009

Bids to build the next Littoral Combat Ships (LCS) have been submitted by both industry teams to the U.S. Navy.

Lockheed Martin announced its proposal was sent to the Navy on July 31, and rival General Dynamics confirmed its plans were sent in by the Aug. 3 deadline.

At stake are contracts to build three ships requested in the 2010 defense budget. The Navy has said the competition winner will receive two construction contracts, while the other team will get one ship.

House appropriators, however, passed their version of the defense bill with four LCS ships, while both House and Senate authorizers have agreed to the three ships in the president's budget. Senate appropriators have yet to pass their version of the defense bill.

Neither industry team would discuss specifics of their proposals. Congress has laid on a cost cap for each of the 2010 LCS ships at $460 million, although both Navy and industry sources call that goal a "challenge," at least until shipbuilders get more ships to build and can realize economies of scale.

Lockheed and its primary shipbuilder, Marinette Marine, delivered their first ship to the Navy last fall. General Dynamics and its shipyard, Austal USA, have run preliminary trials on their first ship and are working to deliver it in a few weeks.

Each shipbuilder received contracts this spring to begin work on a second ship.

No contract awards are expected until after the 2010 defense bills are enacted into law.

Regarding the LCS-2 builder's trials almost one year after LCS-1 builder's trials:

From MarineLog...July 29, 2009
"Navy releases video of LCS 2 sea trials"

Reports filtering out on the builder's trials of LCS 2 Independence, indicate that the Austal-built Littoral Combat Ship attained 43 knots with all diesels, gas turbines and waterjets on line, but at less than full power. Teething troubles encountered have included a leak in the port gas turbine shaft seal.

Meantime, the Navy recently released video of the trials, shot on June 12

Video comparing LCS-2 to LCS-1:

For Sale on Craig's List!?!...

From: http://honolulu.craigslist.org/oah/clt/1299148411.html

Hawaii Superferry Replica Model Alakai - $1500 (Honolulu, Oahu)

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Date: 2009-07-31, 10:07AM HST
Reply to: sale-jvnq3-1299148411@craigslist.org

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Alakai, Hawaiian for "Ocean Path" is the name of the vessel which serviced the Hawaiian waters for a brief time (2007-2009). To commemorate its arrival for Service in August '07, roughly 80 models were created of the ship in intimate detail. (One of the few, if any, that would ever make public circulation) These models which were displayed are various trade shows and exhibitions helped bring to the public a glimpse of the grand vessel that was about to arrive in the islands. Details fleshed out in fully colored replicas of the vessel, including hand railings, emergency rafts, and cars on the second (mezzanine) vehicle deck. This is an EXTREMELY rare collectible that would normally be given out at an executive level.

The replica ship would make a great addition to any lounge or living space. It definitely will make a statement for the office. You will have a dramatic reminder of the vessel that tried to service the Hawaiian islands and caused a controversy that made local news daily. This vessel daily crossed Waikiki towards Daimondhead. You could talk about your personal experience taking the ferry, or liven up the room with a replica catamaran (double hull) vessel. The Alakai was the largest aluminum vessel created and sailed in American waters. It was a vessel 300 feet in length, 80 feet wide, and over 5 stories tall. It could carry over 700 passengers and 200 vehicle interisland.

The model is fixed by shinny, metallic posts to a glossy wood base. It is covered by a Plexiglas case that fits into a fabricated, square notch in the wood base. The overall model is about 18 inches long and 8 inches tall. I do not know the scale ratio to the actual ship.

***WARNING***
The vessel that is up for sale does have some minor damages from being frequently displayed; these damages can easily be fixed by a hobby expert. I know of a shop that would be able to do the repairs, but have not gotten a quote on the fix. The Plexiglas case also has mild scratches.

Pictures are available on request for SERIOUS buyers. There is a second model in my possession that is still in the box NEW, but that would be at a higher price. I would like to meet in person to conduct the transaction, and cash only.

Serious inquiries only.

• Location: Honolulu, Oahu

PostingID: 1299148411