Thank you for standing by, and welcome to the Austal Limited FY 2024 results conference call. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Patrick Gregg, Chief Executive Officer. Please go ahead. Hi, good morning, everybody, and welcome to the FY 24 full year results call. I'm Paddy Gregg, the CEO at Austal, and I'm joined by our CFO, Christian Johnstone. We'll present in the same format as we normally do, with me giving a business overview and context, and Christian will focus on the financial details. As always, we plan to present for no more than 30 minutes and allow plenty of time for your questions. I think in summary, it's been a really busy second half for the company and very exciting to get resolution to some issues that have been outstanding for quite some time, like the Department of Justice matter. And there's a lot changing in the business, and it would be remiss of me not to mention that FY 24 was the last financial year that our founder, John Rothwell, served as chairman of the board. And while John continues to actively contribute to the company as a non-executive director, it certainly was his drive and determination as chairman that set Austal up as a successful company that we see here today. Our new chairman, former U.S. Secretary of the Navy, Richard Spencer, spent a week here in the middle of August and is very, very energized about his role at Austal and Austal's future. I think the outlook is fantastic, both here and in the U.S. I'll talk through that as we go through the presentation today. As I said, Christian will focus on the financial details, and then we'll finish with a bit of an outlook. So if we start with a bit of a summary of Austal, for anyone who's not overly familiar with Austal, we operate five shipyards in four countries. We've got eight service centers in four countries. We have 45 ships under construction or scheduled and some 67 vessels under sustainment contracts. And importantly, we've continued to grow the order book by another AUD 1.1 billion this year to a record AUD 12.7 billion, and the underlying business is performing well. We've delivered seven ships this year, and indeed, if you look at Australia, we've delivered 30 ships in the last five years, which is quite an amazing achievement. I'm certain that has contributed to Austal's position in the Strategic Shipbuilding Agreement. Again, something I'll talk about later on. Headcount globally, sitting around 4,300 people and growing daily. So if we think about the overall summary of the FY 2024 performance, you know, I think the underlying business is performing, and our financial results were significantly better than last year. And while revenue reduced slightly, EBIT increased substantially, and we were pretty much in the middle of the guidance bracket that we gave everybody. We achieved those results despite a blip in the Australasian business. You'll see that in the results. That's not expected to be repeated with the correcting effect of three new commercial orders for our Asian yards and defense programs starting to ramp up here in Australia. We've continued to invest and grow in FY24, which has had an impact on the cash position, but the cash position really driven by the investing CapEx in San Diego and the cash flow impact of the T-ATS and AFDM contracts, coupled with that blip in the Australian losses that we talked about earlier. I don't want to downplay those issues, but we are setting up Austal for future success, and return on that investment will benefit us and shareholders and maybe for years to come. As we've previously stated, future ship contracts such as T-AGOS and OPC were bid very differently to T-ATS and AFDM in terms of cost escalation and labor hours that were used for those bids, but we continue to invest, and we want to invest more. Our investment will grow and increase over the next three years as we invest further in the steel line and associated assembly, launch, and recovery infrastructure. Now that we've resolved matters with the Department of Justice, we can finalize our CapEx funding, and I look forward to providing more specifics on what that investment entails and well-funded in the near future. If I look at the results, you know, I think we should single out the support business for particular praise. Our target was to hit AUD 500 million of revenue by FY 2027, and if you look at the graph we've provided in the pack, we're well ahead of that trajectory with AUD 468 million of revenue booked in FY 2024. And that's before our San Diego yard comes fully online, which is anticipated to be ready for FY 2026. Thinking longer term, we've talked about AUKUS over the past couple of sets of results, and how Austal can benefit from Pillar One with the submarine modules we're already building, and I anticipate growth coming there. Pillar Two is all about technology, and both in the U.S. and Australia, it's pleasing to see the technology businesses are really starting to contribute. And again, I anticipate this will continue to grow. Particularly pleasing, you know, something we've mentioned in the past, we've talked about how it will be a feature in the future, and it's absolutely starting to contribute, so well done to those teams. While a lot of focus is on the U.S., given its importance to Austal's revenue and profitability, Austal Australia is also being set up for long-term success with the heads of agreement to become the Commonwealth of Australia's shipbuilder of choice, here in Western Australia. You know, looking at what has been announced to come through that strategic shipbuilding agreement with Austal, there is probably a 20 look ahead of vessels, including more Capes, Landing Craft Medium, that you've seen about in the press, Landing Craft Heavy, that has also been announced, and then looking to the future opportunities on General Purpose Frigates and Optionally Crewed Surface Vessels. You know, that really is an AUD 20 billion-plus opportunity, giving us 20 years of work, and certainly provides us a runway to continuous naval shipbuilding, something that will take that boom and bust out of our results here in Australasia and replicate what we've managed to achieve in the US, and while these results this year are really important for shareholders, it's also important to have a think, step back and look at the macro level. You know, we've got an AUD 12.7 billion order book, across some 14 programs, and we've carved a unique space in the US defense industrial base, building our own vessel programs with our own design, working on subcontracts for others, such as modules for US Navy and building other designs as well. And then, as I talked about the Strategic Shipbuilding Agreement here in Australia, which we hope to finalize later this year, we'll place the Australian business in the same position we forged in the United States. So if we look at the financial highlights, you know, if I summarize these, reduced revenue, largely driven by lower shipbuilding throughput, but increased EBIT, EBITDA up from 23, despite a challenging year in Australasia. Cash down slightly from where it was, but certainly sufficient cash and facilities for operations. And that operating cash really down as a result of the lower Australasia shipbuilding throughput and the U.S. owners' contracts that we've talked about in previous results and continue to be a feature. Net cash reduced mainly due to investment in the business, predominantly the San Diego facility, dry dock, and also some of the design work we've started for the final assembly sheds for the steel ships in Mobile. NPAT is up, and includes a high US tax charge due to resolution of the BAPA issue and also the DOJ penalty as being a disallowable expense. And again, as per the last set of results, we haven't declared a dividend really due to the future requirement for cash going forward and maintaining that balance sheet as we do that. Looking at the order book, you know, three years ago, we talked very much about the big challenge being: How do we replenish the LCS and EPF revenue that's coming? We were really in a phenomenal position there compared to where we were three years ago. LCS is still ending, but you know, we also had significant uncertainty in the Australian order book, and both in the commercial and defense space. I'm really excited about where that's going and the future that we have in front of us. We've got significant defense announcements that are being worked into contracts in Australia. You know, so we've given you visuals of what those ships could look like, and I've talked about at a macro level, what that could be. You know, it's really pleasing to see announcements from defense and government around intentions, and then being backed up with funding, and signing that contract for the Strategic Shipbuilding Agreement later on this year will really cement that position. Commercial has also been a discussion we've had for the last eighteen months, and we saw a big decline originally due to COVID and then a slow return. We wore some pain this year, keeping those Asian yards open to make sure we were still a major player in the commercial market. I'm really pleased to see those three orders coming in towards the back end of this year. Just that slight delay has what's impacted the Australasian business. Very pleased to have that on order now, and that order book just gives us tremendous opportunity to grow this business, put stability into it, and deliver stable results going forward. So with that, I will hand you over to Christian, who will talk through some of the financial highlights, and then I'll finish with bit of a strategic outlook. Thank you, Paddy. When we reviewed group revenue, it reduced by AUD 116 million to AUD 1.469 billion, largely driven by the reduced revenue from the maturing LCS program in the US, which decreased AUD 166 million year- on- year, which was somewhat offset by increasing revenue in the US support business and advanced technologies business, which both delivered strong results, increasing by AUD 85 million. In Australasia, there was a reduction in defense work and minimum commercial vessel construction, leading to a reduction in revenue for this segment. Turning to group EBIT, we delivered an underlying EBIT of AUD 59 million in line with market expectations, based on strong performance from mature programs in the US, which more than offset the provision taken on the AFDM program and Australasia losses. As previously mentioned, the increased revenue from the U.S. support business and also advanced technologies contributed to a strong EBIT result from this segment of AUD 51 million. In Australasia, there was a decline of AUD 29 million, primarily driven by minimum commercial build contracts for our Asian yards and a decline in defense patrol boats, reducing throughput for all of these yards. The award of four patrol boats that occurred late in 2024 was too late to deliver any significant contribution to the results this year, but we do not expect this trend to continue into FY 2025. There were two items in FY 2024 which substantially offset each other. As mentioned by Paddy, we've now settled the long-running DOJ SEC matter, which we have fully provided for in FY 2024. The negative impact on earnings was offset by the finalization of our sale of land in Mobile, which generated a substantial gain on disposal in conjunction with land being acquired by the group as part of this transaction. This led to underlying EBIT and statutory EBIT being in line. We review our cash and capital expenditure. Operating cash flow was significantly impacted by the onerous T-ATS and AFDM contracts and the Australasia loss. Capital expenditure was AUD 45 million lower than FY 2023, at AUD 48.5 million, primarily related to our San Diego support business and design work for the expansion of our assembly project in Mobile. The proceeds from the sale of land of AUD 48 million was effectively reinvested in the business. In the second half, we drew down on our revolving facilities to rebridge until we have a settlement of our request for equitable adjustment for the T-ATS program. As Paddy mentioned, no dividend is declared due to forecast capital expansion, capital extension, and the impact of the DOJ resolution. We ended FY 2024 with cash of AUD 17 million, and we have sufficient cash and facilities for our operations. Looking a little bit deeper, a segment breakdown into the USA US shipbuilding revenue declined a hundred and forty-four million, sorry, at a headline level, driven by declining throughput in the reducing LCS program, with one vessel remaining for delivery during FY 2025. There was growth in other programs that OPC, T-AGOS and EMS will replace this decline. The US support revenue increased by $93.5 million, driven by increased availabilities in Singapore and growth in advanced technologies business. It is pleasing that margins in both US shipbuilding and support have improved on the prior year. The T-ATS and AFDM programs have no margin recognition due to their onerous nature. As we have previously stated, the future ship contracts were bid very differently to T-ATS and AFDM in terms of cost, escalation, and labor hours estimation. As we commence FY 2025, we are pushing to resolve the request for equitable adjustment on the T-ATS program and efficiency and recruitment improvements on AFDM. When we look to the segment breakdown in Australasia, Australasian shipbuilding revenue decreased AUD 67.5 million, driven by minimum commercial ferry construction. Austal defense, which is patrol boats revenue, reduced by AUD 41.8 million from FY 2023, with lower throughput on existing Guardian-class and Evolved Cape-class patrol boat programs, and the secure contracts that they won, which was two of each of those vessels, had minimum impact on the year. The revenue from our Asian yards, which are predominantly focused on commercial, on the commercial market, reduced by AUD 25.7 million, with minimal work during the year. The awards of Dory 2 for the Vietnam yard and Bella post June 2024, will provide throughput for those yards in 2025. The negative shipbuilding margin is driven by minimal commercial work in Asia. The impact of that was AUD 17.9 million and lower defense and patrol boat activity. This is not expected to be repeated in FY 2025, due to the positive impact from the Strategic Shipbuilding Agreement and commercial and defense orders received in calendar year 2024. Australasia support has slightly higher revenue, AUD 4 million, and EBIT of AUD 0.8 million in FY 2024. When we now look at the long-term investment proposition, the graph show historical share price, our earnings, our order book, and revenue. Over the past seven years, Austal has delivered nearly AUD 12 billion of revenue and around AUD 580 million of EBIT, with an average EBIT margin of 4.9%. This margin has exceeded 7% when major programs, such as the LCS progress beyond the high cost ramp-up phase to a steady-state, profitable phase. When you focus on the growth in the order book, you can also see there's been a disconnect over the last three years between the order book and share price due to execution and start-up challenges on some of our programs. Today, we have a record order book of around AUD 12.7 billion, which exceeds our total revenue for the last seven years. At the seven-year average EBIT margin, this can potentially deliver over AUD 600 million of EBIT to the company, which, with significant upside as major programs move to a steady state. We continue to work hard to position the company to profitably execute on a record order book and remove the share price order book disconnect. To achieve this, we have carefully managed cash ahead of the planned CapEx program to build out revenue capability, resolve DOJ investigation, improving certainty around forward cash availability and requirements for the investment program. We've maintained a net cash balance that provides growth flexibility for future investment, and we've implemented management changes at Austal USA to drive profitability, investment and growth. The order book is shown inclusive of all the OPC, T-AGOS and LCU contracted options, including those that have not yet been exercised. What is currently not in the order book is the contracts relating to Austal's strategic shipbuilding agreement in Australia. The Minister for Defense in Australia announced that Austal will build two more E-Capes, and subject to contract, the medium landing craft, heavy landing craft with programs totaling approximately AUD 4 billion. The Australian Surface Fleet review has provided for eight General Purpose Frigates and six large optionally crewed vessels announced to be built in Australia, in addition to the three General Purpose Frigates to be built overseas. Our guidance for FY25 will be provided in advance of our AGM. But with recovery in the Australian operations and EBIT, EBIT growth is anticipated. The key drivers of our guidance include the record order book of AUD 12.7 billion, increased orders anticipated through the Strategic Shipbuilding Agreement, increased volume of work in Australasia, improving productivity on T-ATS and AFDM programs, a T-ATS REA progress, and a weakening US dollar could reverse the tailwinds experienced in FY24. I will now hand back to Paddy. Thanks, Christian. So if I just finish with my version of the outlook and where I think the company's going, and then we'll open up for questions. So thinking about it, you know, that record order book in the US, with Australia set to follow through the Strategic Shipbuilding Agreement, really sets us up very nicely for at least the next decade. The underlying business is performing. You see that in the results, but our focus must be on remedying those startup challenges. We believe the issues on T-ATS and AFDM are confined to those programs, and as we've talked about before, there's a lot of focus on the request for equitable adjustment to resolve the T-ATS issue. And then Australasia is set for growth through the Strategic Shipbuilding Agreement, and those commercial orders already received hopefully help you understand why we took a bit of pain in Australasia this year to keep those Asian yards open, ready for more revenue and profit in the future. DOJ resolution, it's fantastic to have that off the agenda. That's been a lot of work for a number of people for years, quite literally. And resolving that financial unknown really allows us to finalize the financing of the CapEx in the U.S. for growth, and we'll come back to you in due course and update you on what our plans are there. We are transitioning to a new order book, new programs, which will bring great growth to the business, both in terms of revenue and profitability, and that will also bring a lot of jobs. So I anticipate between the US and Australia, we will be recruiting in excess of two thousand people over the next two to three years. And there are more opportunities on top of what we've talked about today. You know, AUKUS and submarine modules, I see opportunity for growth there. The technology businesses, both in the US and Australia, additive manufacturing, our new additive manufacturing center of excellence in Danville, opening and growing. You know, it feels like that is just gonna become a bigger and bigger feature and more helpful facility for navies going forward. Most importantly, the relationship, both in Australia and the United States, with our customers, is growing and strengthening. And that's at a very, very critical time, whenever we see defense becoming more and more important. And probably later on today, you'll see some great media coverage of the commencement of the OPC program in the US with the steel-cut metal ceremony happening as well. So lots of exciting things happening in the business, working through the transitioning, great order book in front of us, and a very, very exciting time for the company. So with that, I'm happy to open the line for questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. In the interest of time, we do please ask that you limit yourself to two questions and rejoin the queue if you have any further questions. Your first question comes from Sam Teeger with Citi. Oh, hi, Paddy. Hi, Christian. Thanks for the presentation today. Hi, Sam. Good day. Yeah, yeah, first question. Appreciate that it's outside of your control, but, you know, I would have thought that the T-ATS REA would have been close to finalized by now. Just if you could talk a bit more in terms of any update into timing, and how do you think about how much funds you need to raise for the overall expansion in Mobile with this REA still outstanding? Yeah, great question, Sam. So yes, we've talked previously that the REA process is not a defined one, as often is the case, on defense contracts. So the dilemma we've got really is making sure that we fully understand the consequence of the design changes, and therefore, don't shortchange ourselves whenever we finalize the REA. So a huge amount of work has happened over the last year and more specifically, six months, in terms of the cause and effect of the design deficiencies and the impact that has had in production. We need to make sure when we go for the REA, that we are absolutely encompassing all of the costs that we have incurred. And our dilemma is when's the right time? So yes, it's costing us cash while we haven't got it resolved, but we don't want to resolve it at a lower figure than perhaps is justifiable. That's something that we're working through. We've got a great independent expert that is working alongside us, that specializes in these sort of claims, and we're taking Navy on that journey with us, in terms of helping them understand the sorts of impacts that have happened in the business, the quantums that we're talking about, potential solutions. You know, there might be some novel solutions in there where we can work with the customer to come up with a best answer for Navy and for Austal, so it's not a very straightforward answer in terms of we'll be submitting it on Wednesday in two weeks. We have a very mature claim, which could be submitted, and our question is: when is the right time? To not avoid your answer, you know, I think we need to resolve this in FY 2025. We're working very closely with Navy on that and a number of other issues to try and bring that to a conclusion this year. Got it. And then that will also feed into what do we need for the CapEx, you know? So we've talked about a desire for up to AUD 300 million investment for consolidation sheds for the steel vessels, in the same way we have consolidation sheds for the aluminum vessels or the aluminum vessels, for my US colleagues that are on the line. And that is absolutely something we want to do because it sets the business up for pretty much every program we foresee Austal being interested in for the next 20 to 30 years. It also incorporates a ship lift, which will allow us to more easily launch and recover very big, heavy vessels that we build in Mobile and maybe even be used for submarine modules as well going forward. That's just something we're working through the Navy to make sure we absolutely invest in the right capability to maximize our future opportunities. And the complication with all of that is cash flow, because, as you know, we're reasonably good at generating cash. It would probably take us the best part of three years to complete that investment. So the CapEx we require is a function of what's happening with T-ATS, how much cash are we generating, and the profile of the new investment. So I'm sorry it's not a very straightforward answer, but it's, those are the factors we're wrestling with on a daily basis. Sure, I understand. Just to kind of clarify what you said, when you say you're making sure you fully understand the consequence of the, the design changes, is it fair to say you're only gonna really know the consequence once that first boat is in the water? And then what proportion, like, what percent are you through building that first boat? So there's a picture in the pack, actually, that will give you an indication of just how far through the vessel we are. You know, we're much greater than 50%, and I guess the optimum time for us would be when we launch the vessel, we think. You know, that's when we should have a real idea of what it's cost to build the vessel. As you know, we launch at a very high completion rate, 90-plus% greater, which gives us the confidence in terms of the overall delivery of the program. So you know, I think launch would be the latest. Operational needs may suggest that it would be prudent to go sooner than that, but certainly FY 2025 is the year that we will be focused on resolving the T-ATS issue and CapEx funding. Got it. And then just when we're thinking about how you're gonna fund the Mobile expansion more generally, just be interested in any comments you can make in terms of what proportion of the funding do you think will be funded by government grants, and what's the appetite to raise equity, given the share price is still at a discount to NTA? Yeah, good, good question. I don't think the same grants that we had for the steel investment are available. So it looks like we will be doing this ourselves. You make a really good point on the equity side of things. Yes, the share price is trading below net tangible assets, so that's not preferable. And we have had a lot of interest in debt based on the fact we have very big order of very long-term, government-backed contracts. There is a lot of appetite for debt in the U.S. and a lot of support on that. And it's really the resolution of the DOJ matter that turns a question mark into a number in a spreadsheet. We're now, as soon as we get through results, very focused on finalizing what the right answer is for that CapEx cash. Your next question comes from James Lennon with Petra Capital. Oh, good day, guys. Good results. Just wanted to two questions. Firstly, just I'd be keen to know a bit more detail around, you know, what the miss was in terms of the revenue. You know, where you ended up versus guidance. I know you mentioned there's a few things that were a bit slow to get off the ground, but if you can give a bit more detail about what these were. Yeah, it really is that transition as we come off the mature programs. You know, how quickly can we get through the design? That really opens up getting through design opens up the ability to place long lead orders for materials, which starts to drive revenue, and then getting into actual production and ramp up of people. So some of the factors that we've talked about in the pack, it's taken us a little bit longer than we anticipated, just to get through the design phase and really get going. But, you know, as I, as I said at the very conclusion of my opening remarks, getting to cut metal on OPC is a great milestone, and, you know, I think, I think we're through those delays, and we're really now starting to open up the work fronts that allow that revenue to, to increase. Great. And just, I know you haven't given any explicit guidance, but, you know, sort of noting that you think, EBIT will grow this year, just, just keen to know, you know, given that, some of the higher margin programs are running off. How confident are you that you can replicate or, if not beat, that sort of EBIT margin you got for the U.S. at sort of 2.9%? Yeah, so I think the underlying business is performing pretty well. You know, we've seen good results coming through the support business, which doesn't tail off with mature programs. We're seeing the technology businesses, both in the U.S. and Australia, starting to grow. We're seeing submarine modules coming online and absolutely in production. The main program that rolls off is the LCS program. And that revenue gets filled by OPC starting to come online, that we've just talked about. And then, if you just consider the blip in Australasia, that we don't expect to repeat, you know, that was a AUD 29 million hit to the bottom line. So that gives us the confidence that, you know, there's a lot of areas that, if we hadn't had a few, missteps or slow starts this year, actually the result could have been, better than it was. You know, I'm really pleased. It was in the middle of guidance. But the reason we gave a range this year, and quite a broad range, was because of, a lot of the big swing factors that we're trying to wrestle with, to give you the most accurate guidance and the most, the best overview of the business we possibly can. So, Christian talked about a few of those factors that we wrestle with on a daily basis, some of which are outside of our control. As we come through that in the next couple of weeks, we'll absolutely be ready to put out a number we're very confident in with profit guidance. That's why we've tried to signal that, you know, if you just look at some of the factors that we don't expect to repeat this year, that's what gives us the confidence that EBIT will grow next year. Yeah. Great. All right, one, one more quick one, just quickly. With the Strategic Shipbuilding Agreement, are there any risks around that, that not being signed? I mean, any thoughts there? I'd love to say no. I don't think there are great risks. You've seen the announcements that have been made by defense and by ministers, so they're very, very keen on making it happen. Negotiations are going well. There's a huge amount of work happening behind the scenes with our team and with the Commonwealth team to make that happen. You know, a couple of weeks ago, you probably saw Minister Conroy on site at Austal again, talking about the landing craft program, the urgency of that program, the fact that they want ships at the back end of FY 2026. It's that Strategic Shipbuilding Agreement that underpins those contracts and will allow us to deliver in line with what has been announced. I think it's a very, very high probability. I'll never say 100% because it's defense procurement, but yeah, it certainly looks very positive from my perspective, and that just enables ten years plus of future. Sounds good. Thank you. Your next question comes from Gavin Allen, with Euroz Hartleys. Good morning, guys. Thanks for that. All very good. Just a quick one for me. So support was a highlight, looked like in the U.S. Just wondering how we might think about this as San Diego and the dry dock there gets up and running, and also maybe a bit of color on support in Australia going forward? Yeah, so dry dock will be important because it opens up a whole new revenue stream. The ability to lift vessels out of the water and do underwater work will be another string to the bow, and it's all part of that journey we embarked on a few years ago to get to AUD 500 million. You know, that's taken a bit longer than we wanted. A few environmental rules and regulations have popped up that are perhaps new or unforeseen compared to what we'd agreed whenever we set out on this journey. So we've just got to work through that. That's the joy of California. But certainly, through this year, we see that commissioning. You'll see in the pack a photograph. The dock is actually there. You know, so it could be operational. We've just got to get through all the environmental controls and regulations and get it commissioned and, then we'll be ready to start winning work. You know, we think the overall thematic has remained, that there is more requirement for docks than docks available. You know, so we're confident that is gonna contribute to the revenue in a meaningful way. Terrific. And life in Australia? Yeah, you know, really exciting in Australia. You know, from a support perspective, we continue to deliver ships. So the patrol boat pie is growing and, you know, hopefully our slice of that continues to grow. The business is performing well. You know, as you guys get into the detail, you'll see, you know, a little bit higher WIP than we've had previously. Yeah. Sometimes a feature of that type of work, but I think good opportunities for us as a business, as that pie grows, that we can continue to deploy our people and our skills and, you know, our facilities up in Cairns, absolutely helping grow that support business and that overall target. Terrific, guys. And just one last one for me, just to clarify on this track. So you talked about that being a blip in 24, that's not expected to be repeated. Would you see this as based on the order book as it is now? Do you still need to win it, or, you know, ink up a few more contracts yet to turn that around, do you think? So what we've won will definitely turn it around. Yeah. I think there's opportunity for more, so we're not at maximum capacity. You know, if you look in some of the press results, there's a big operator in Scandinavia, Gotland, that we're working with. We've partnered with them for design. They've actually won the route license, and if that comes off, you know, that could be a 130-meter dual fuel boat, which would keep the Philippines busy for three years. So I think with what we've won and what we see coming in the pipeline, confidence is really growing that we're gonna get back to meaningful results in the commercial market, which is great to see. You know, we've already seen work ramping up in Australia, and we know there's more coming with the landing craft programs later this year. So I'm confident we've turned around from last year, but as always, we could take a little bit more and sweat the assets. Makes sense. That's plenty for me. Thanks, Christian. Thanks, Paddy. I'll leave it there. Thanks, Gavin. Thanks, Scott. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Andrew Mouchacca with Flinders Investment Partners. Good day, guys. Thanks for the presentation. I've got a quick one for you. Just going back to the actual result presented now. You've provided the underlying EBIT of 59, but I wanted to And I noticed that there are some one-offs in the tax line of around 9.1 associated with those penalties. But I'm wondering, I still get a tax rate in that underlying sense of over close to 40%. So I'm just wondering, is there anything that's worked in the interest line that is one-off in nature as well? In the interest line or tax? The tax line, I can see the nine point one as per note nine. Yeah. Unless there's something more than that, more than the nine million. Hey, no, no. So the tax line, it's probably higher than what you would expect, and because in the US we have a higher tax bill because we have a concession in the US around large-scale construction programs and the programs that were completed around five years ago have now come, and now the big tax is crystallized on that particular immature program. So there's a bit of a disconnect between what you would expect as a normal kind of run rate, effective tax rate and where our results are. So there's just that, that's just a different alignment between taxation treatment and accounting treatment. But then on the- Sorry, Christian. I think I might have been unfair. I noticed there's a non-deductible fine and penalties of AUD 9 million in your tax line. Yes. Okay? Now, all I was asking was, is there anything associated with those fines and penalties that exists in the interest line as well? Yeah. So we are on a twelve-month payment plan so that, like any government entity, if you owe them over a period of time, then they've got a right to charge interest. So there is an interest component related to that fine in the interest line that's been provisioned for the next twelve months. Okay. Thank you for that. So the number, if you, if you'd have to identify a, if you had to guess what a, normalized NPAT was for FY 2024, and again, I apologize for looking in the past, given the focus of this presentation was in the future, it'd be somewhere closer to AUD 27 million. Is that what you'd w ould you agree with that? It's not something we've worked on, to be honest, but one, we haven't thought about normalized NPAT. No. Okay, that's fine. We'll have a think about it, and we can always follow up next week or something like that. Yep, no problem. Like I said, it's history, not the future. Thanks for the presentation. Cheers. Thanks, Andrew. Your next question comes from Dennis Moore. Good morning, and thank you. I know everyone likes to know what the next, you know, year's guidance is gonna be and so on, but the way I try to think about the company is thinking about three to five years ahead. In other words, what you've done a lot of preparatory work in the last eighteen months, you've got another AUD 3 million or AUD 4 million in the next couple of years just building the business up. I'm interested in, say, after that's done, maybe in 2027, 28, what other work can you do to build a bigger base for your business? Yeah, that's a great question. So, with the programs that have been announced, we will grow quite significantly. You know, adding 2,000 people to 4,300 suggests there's, you know, our business is generally driven by materials that you buy, and then the other half of it is the people that you bring on. So, you know, 2,000 people, in my mind, suggests that at least there's an additional 33% revenue growth coming forward and profitability on the back of it. That's just with what we've won. And remember that $12.7 billion dollar order book excludes the Australian stuff. You know, we are not on full contract for medium landing craft and heavy landing craft. That was announced by the minister as up to AUD 7 billion. Yeah Australian dollars of work. Some of that AUD 7 billion will obviously be government costs for their project management and contracting costs, but the vast majority of that should be coming to Austal for those programs. Then you look forward to General Purpose Frigate, which will be a very big program, eight ships to be built in Australia. Again, that will be billions and billions of AUD of work. And you know, then some of the other features that we talked about around technology, additive manufacturing, the sustainment software that we have developed here in Australia, we'll continue to prosecute opportunities to sell that. The commercial market coming back, you know, we've only scratched the surface of that. You know, in years gone by, we've probably done close to AUD 150 million of revenue per year in the commercial market, so there's a great opportunity there. And the other big one, which I think is a very, very exciting opportunity, is, of course, the submarine modules in the U.S. and what comes with the AUKUS pact between U.S., Australia, and U.K. And also being in that unique position that we're one of the few Australian primes that has major operations in the United States, and we are a ready-made conduit for work and agreements between the U.S. and Australia to increase revenue. And if you want even more on top of that, if you look at the presentation that we post online, you know, there's a series of opportunities that we talk about on the expanding shipbuilding side with some of the bigger programs in the U.S. as well that are coming with Frigate Second Source, Large Unmanned Surface Vessel, Next Generation Logistics Ships. You know, the U.S. Navy continues to place orders, and with the facilities we wanna build, we'll make sure they are absolutely capable of taking those programs going forward. So, you know, I really am genuinely excited that we have a huge order book today. It will grow tomorrow with what's already been announced, and we see more opportunity in the future. So pretty exciting time. Can I just have one other question? And that is, you've laid down some pretty good groundwork for growth and profitability over the next sort of thirty-six months. But you're sort of I look at it and see still sitting on your shoulder, someone who might want to, you know, take you over or do a joint venture with you. And the problem that I foresee is that, here you are doing all this hard work, and you'll be doing that again for the next three or four years as well. If you're gonna get taken over, so it's the most sensible time for somebody to take you over is in the near future, rather than waiting until you've got a mature business. Do you have any comment on that? Yeah, I don't disagree with your logic. You know, we focus on a daily basis on our strategy. We think we've got a great strategy, and you know, in my mind, doing very well against it. Thinking back, as I said earlier, to three years ago, when it was doom and gloom, you're going out of business, you've got no work. We've almost got the opposite problem today. You know, so we're gonna absolutely focus on that, and if somebody comes along and is interested, the board will only act in what they believe is the best interest of shareholders. And if you're worried from a sovereign perspective or a nationalistic perspective, of course, you know, there are controls in place with the Foreign Investment Review Board here in Australia and CFIUS in the United States that will decide, even if there is an offer that's in the interest of shareholders, is it in the national interest? So I think there are sufficient controls in place that nothing strange will happen. And in the meantime, you know, management's focus is 100% on the business and acting in the best interest of shareholders. Well, thank you very much, and thank you, Mr. Rothwell, as well, because we've been with you guys for a long, long time, in the ups and downs. So thank you, Mr. Rothwell. Thank you. Bye-bye. I will pass that on. Thank you. Your next question comes from Sam Teeger with Citi. Oh, hi, Paddy. Just, just one follow-up on the question you just answered. Just any update surrounding Hanwha, and what's the company's willingness to engage with them specifically? Them specifically, you know, anyone who's interested in the company will be treated in the same way, and it's always with the lens that what's in the best interest for shareholders. As we announced to the ASX, we had some concerns around transferability. You know, we'll continue to work through that, and having informed the market with an announcement, if anything changed, we'd be duty-bound to inform the market again. Fair enough. So those concerns you have around transactability still remain. Is that fair? Ongoing discussions, yeah. Thank you. Your next question comes from Ben Felton with Australian Defence Magazine. Hey, Paddy. Thanks so much for taking the time. You've got a mention in your presentation about an opportunity with the Philippine Coast Guard. What do non-Australian and non-US defense opportunities look like now? So most of our focus is the commercial market, but of course, when we've got yards already set up in the Philippines and Vietnam, you know, Philippines is an opportunity for us. We had a go at a Philippines offshore patrol vessel some years ago, and we were unsuccessful, unfortunately. We've got a great relationship with up to and including the President in the Philippines, based on the work that we bring to Balamban and Cebu. We're a very, very big employer there, and it's a great opportunity for the Philippines to employ people want a nice solution, building vessels for their Coast Guard, stroke, stroke, defense forces. Noting the relationship between Australia and the Philippines is strong and getting stronger every day. You know, we just see that as a win-win for Austal Australia and the Philippines. So something we're working on. Their procurement processes may not be as transparent and well defined as they are here, but we've got great engagement with the Coast Guard. We get tremendous support from the Commonwealth of Australia through the embassy, which we're very grateful for. And you know, if that would come off, wouldn't it be great to be doing defense and commercial work in the Philippines? And again, we like that because it sort of takes the boom and bust out of what can happen through the commercial market and try and balance those two customers. So, exciting opportunity there, and we'll continue to prosecute it. You know, makes it so much easier whenever we've got existing facilities and workforce. Thank you. There are no further questions at this time. I'll now hand back to Mr. Gregg for closing remarks. Thank you, and I'd just like to say thank you all very much for dialing in, asking your questions this morning. I think a very strong set of results with a few quirks in. As always, it's a complex business, but the way I see the outlook is growth, great opportunity. We've resolved one big issue with the Department of Justice and we'll look forward from now on. I'm confident we'll resolve the tax issue in the same way, and that's not something we'll be talking about going forward. Then it's about making that transition, and as Christian talked about with that investor prospect, I think it's just a great time to be coming in as we start this journey of growth over the next probably 10 years, based on the volume of work that we've won. So, thanks very much for your support. Thanks very much for your questions, and we'll talk to you all soon. That does conclude our conference for today. Thank you for participating. 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