U.S. Navy increases order for Australian designed combat vessel

The U.S. Navy has increased their order for a Littoral Combat Ship from Australian maritime defence manufacturer Austal Ltd. in a deal worth up to 564 million U.S. dollars.

Perth-based Austal on Friday said the U.S. Navy had ordered an additional Littoral Combat Ship, increasing its LCS orders to 11 from the original 10 contracted in 2010, taking the total value to 3 billion U.S. dollars and securing construction at its U.S. shipyard until 2021.

Outgoing Austal chief executive Andrew Bellamy said in a statement he was pleased the U.S. Navy has confidence in the "high quality vessels" given the delays in the progress in the LCS building program which caused a margin earnings downgrade in December.

"We are working hard to increase production efficiencies and reduce costs as the program matures," Bellamy said.

Austal has already delivered three LCS to the U.S. Navy and, at present, has seven others under construction at its Alabama state shipyard.

The company's shares closed 1 Australian cent (0.77 U.S. cents) or 0.64 percent higher to 1.58 Australian dollars (1.21 U.S. dollars) in a market that was heavily sold on Friday.

Out of its Australian shipyard, Austal is constructing two Cape Class patrol boats under a deal with the National Australia Bank to be leased for a minimum three years by the Australian Department of Defence, and two high-speed support vessels for the Royal Navy of Oman.

Bellamy added the company has delivered six of the 10 contracted 103-meter fast transport vessels for the U.S Navy in a deal worth 1.6 billion U.S. dollars.

Board member David Singleton takes over from Bellamy who is resigning after five years as chief executive on Monday. Endit