US Navy Orders More Warships From Austal

US Navy Joint High Speed Vessel JHSV

MELBOURNE (Dow Jones)–The U.S. Navy has ordered two more Joint High Speed Vessels from Australian shipbuilder Austal Ltd. (ASB.AU) as part of a 10-vessel program potentially worth more than US$1.6 billion, the company said Friday.

Perth-based Austal said in a statement the 6th and 7th JHSVs, 103-meter long high speed, multi-purpose vessels, will be built at its U.S. shipyard in Mobile, Alabama.

“With options remaining for a further three vessels, we expect the JHSV program to deliver a predictable revenue stream of approximately US$300 million per annum from 2012 to 2015,” Chief Executive Andrew Bellamy said in a statement.

The company is currently building three JHSVs, with the first due to be delivered in December.

Austal is also building a second 127-meter Littoral Combat Ship for the U.S.Navy with options for another eight.

Last month Austal’s shares fell 2.9% following reports of “aggressive corrosion” in the propulsion system of the company’s first LCS, which is designed to operate in coastal waters. The shares have since recovered and closed Thursday at A$2.78.

In May, Austal was forced to downgrade its profit guidance for the year ending June 30 to as low as A$20 million from A$28 million because of the strength of the Australian dollar.

The company said at the time it would review its Perth operations with a view to refocusing its capabilities towards the manufacture and support of defense vessels.

-By Gavin Lower, Dow Jones Newswires