Good afternoon, ladies and gentlemen. On behalf of the Board, I'd like to welcome you to the 2025 Annual General Meeting of Austal Limited. My name is Richard Spencer, and I'm the Non-Executive Chairman of Austal. This is a shareholders' meeting, and only shareholders, their proxies, attorneys, and authorized representatives are entitled to speak. The meeting is being webcast to shareholders who are unable to attend in person. As it is a webcast, virtual participants will be able to listen to the meeting, view the presentation materials, but not be able to ask questions or make comments or vote through the webcast facilities.
I'd like to introduce my fellow directors, who you can see at the table beside me: Lee Goddard, who's been on the Board since 2023; Kath Tui, who joined us in February 2024 and is Chair of the Nomination and Remuneration Committee; Brent Cubis, who joined us in October 2024 and is also Chair of the Risk and Audit Committee; Richard Gibb, who commenced in June of this year; and Sue Murphy, who just joined us in September of this year; and, of course, Paddy Gregg, our Chief Executive. Each of our Board members is present and able to assist in answering any questions that you may have. We also have representatives from the company's auditors and external legal advisors present in the audience. Ladies and gentlemen, this is my second address to you as Chairman of Austal.
When I stood here 12 months ago, I was just four months into the job, and it was taking over from longstanding Chairman John Rothwell. Those were big shoes to fill. As a result, my comments at that time were very limited to my preliminary observations, and I made a few remarks on where I saw the opportunities for this amazing company. I knew being Chairman of Austal wasn't going to be a lifestyle role, or I wouldn't have taken it. It's been one hell of a ride for 12 months since I last took this podium, and we want to share that with you today. There will be a slide in your fiscal year 2025 results presentation, which Paddy will discuss when he speaks a bit later, that details every major announcement that we made in fiscal year 2025. Not all of them, just the major announcements.
To our shareholder last year who complained about the font and the size of the slide, I apologize in advance because there's a lot on that slide. It was a graphic designer's nightmare because the slide is quite busy, because the company has been quite busy, especially over the last 12 months. Busy developing the foundations for future success, busy closing out some of the issues from the past, and busy building high-quality vessels and commercial ferries for our valued customers. Today, I want to expand on three of those events and what they mean to Austal and to you as our shareholders. Just prior to our 2024 Annual General Meeting, Austal announced that through General Dynamics Electric Boat, the U.S. government was investing $450 million, or A$680 million, to build Module Manufacturing Facility No. 3, as Austal was to expand our role in manufacturing for the U.S. submarine base.
MMF3, as we love to call her, will provide 392,000 square feet. That's close to 36,500 square meters of indoor manufacturing space. The U.S. needs to increase the delivery rate of the Virginia-class submarines from its current rate of 1.2 submarines per year to the required production rate of 2.3 per year to meet the U.S.'s commitment to AUKUS, including the transfer of submarines to Australia, while also fulfilling its own domestic needs. Outsourcing modules is the key strategy in the United States for employing speed to enhance the production rate. When MMF3 is up and running in late 2026 or 2027, it will be a case of when, not if, contracts flow to Austal to build more modules for more submarines.
To give you some perspective as to what that means for Austal, MMF3 will be capable of delivering up to 3 million work hours per annum, work hours which contribute to Austal's revenue and profits, to deliver up to 14 modules a year. Relatedly, in March of this year, we announced a successful $220 million placement and share purchase plan to fund the construction of Final Assembly Plant 2. In June, we announced a $488 million debt refinance, with most of the debt also earmarked for FA2. That debt includes $160 million from the Australian government's Export Finance Australia, and it is truly great to have them on board. It further demonstrates support from Canberra, and I'll speak about more of that later. FA2 is larger than Module Manufacturing Facility No.
3, coming in at more than 400,000 square feet or 37,500 square meters, with a ship lift that can launch New Build U.S. Navy and U.S. Coast Guard vessels, and also size for the capacity of an Arleigh Burke-class destroyer, the Tactical Auxiliary General Ocean Surveillance vessel, and it can handle the length of a frigate. We plan to assemble modules for the offshore patrol cutters and ocean surveillance ships, i.e., the Tactical Auxiliary General Ocean Surveillance vessels, in Final Assembly Plant 2, so it's crucial for our infrastructure for growth. With the combination of equity capital, debt funding, and future cash flow from operations, construction of FA2 is fully funded and is well underway. The last significant announcement I want to touch on is the signing of the Strategic Shipbuilding Agreement with the Commonwealth of Australia.
The SSA, as it is known to us, appoints a new Austal subsidiary, Austal Defence Shipbuilding Australia, as the Commonwealth's strategic shipbuilder for Tier 2 surface combatants at Henderson. The Tier 2 vessels, including landing craft medium, landing craft heavy, and general-purpose frigates with optionally crewed vessels, are in the mix. Under the SSA, Austal will be the prime contractor for landing craft medium and landing craft heavy, and then, provided we perform and the Henderson Precinct is consolidated, we will build the general-purpose frigate and optionally crewed vessels. The importance of the SSA cannot be overstated. Subject to our performance, it has effectively announced Austal as the shipbuilder of the aforementioned vessels for the next 20+ years, providing outstanding forward visibility of our production schedule and potential order book in the tens of billions of dollars when those programs are all combined.
It provides longevity for shipbuilders, ship designers, fabricators, fitters, all looking for long, successful careers in the Australian shipbuilding industry. It is a terrific agreement for all parties. The Board, management, and I are extremely conscious that contract announcements, SSAs, and capital work announcements are fantastic, but if they don't ultimately generate value for our shareholders, then we must question their real value. I'm pleased to report, I was pleased to report in August that our fiscal year 2025 earnings before interest and taxes had doubled to $113 million, and our profits had increased fivefold to $90 million. In addition, our contract wins have outpaced the work performed, so our order book, inclusive of options, grew to $13 billion.
It was a great financial success, which reflected the hard work of ship designers, builders, commercial and finance teams, as well as our executives, to execute on the base that they had established in previous years. The base we are establishing now will underpin future positive financial results. While it may be challenging to repeat the same rate of earnings and profit that we have in fiscal 2026, there will be growth nonetheless, which Paddy is going to provide you more insight after I speak. While it's not an Austal-specific topic, every time I'm here in Australia, I get the question about the U.S. commitment to AUKUS. I'm on the record as saying I truly believe that AUKUS is some of the best statecraft that has been put together in the past 70 years, circling three tremendous allies.
President Trump's recent statements on AUKUS, when Prime Minister Anthony Albanese was in D.C. two weeks ago, indicate that the U.S. remains firmly committed to AUKUS and removes a lot of questions about the studies that have been underway. I must say there's been a lot of focus on the politics of AUKUS, but little on how it positively impacts on the ability of the U.S. and Australia to defend their nations. One of the key areas impacting naval battle strategy is how long a vessel can remain on station before it needs to be resupplied. Some facts. On sailing times alone, the journey to free metal from the South China Sea is approximately one-third to one-half the time taken to transit back to the West Coast of the U.S. That figure is the same on the return journey.
This massive advantage in any Asian engagement, and that figure alone, is reason enough for us to continue backing AUKUS. When you combine that fact with other strategic and operational rationale, I think it's safe to say that AUKUS is here, and the expanding role that Austal can play in AUKUS is on our shoulders, and we will take advantage of it. That said, Australia should not be complacent either. The pace of progress in Australia to increase its force posture has been slow, and while there are various reasons why that inertia exists, it exists nonetheless. As the saying goes, no snowflake feels responsible for an avalanche.
While most of these delays are likely to be individually justified, the net effect is that programs that should be underway to equip Australia's armed servicemen and women with the infrastructure they need to defend this nation and contribute to Austal's strategic position across the region, AUKUS, and the globe remain in the planning stage when they should be in the build stage. In addition to impacts on our frontline troops, geopolitics, defense, and AUKUS, the delays also impact prime contractors such as Austal in terms of labor requirements, revenue, and even ability to meet our ESG commitments. Supply chain participants are also impacted. Those who've been gearing up to partner with us, those that have been installing new equipment, purchasing their own long lead items, and expanding their workforce are at risk.
It's time for Australia to pick up the pace and to match the pace of our allies as well as the pace of our adversaries. Back to Austal. Before I finish my address, it's important to note that there is a significant change to the composition of the Board members seated in front of you today. Most markedly, for the first time in the company's history, Austal founder and former Chairman John Rothwell isn't sitting up here. John retired from the Board at the start of September, ending his formal association with the company that he founded 38 years ago. As I said at that time, and I want to publicly repeat today, John has left an indelible mark on Austal specifically, but also shipbuilding in Australia, the United States, and in general.
His drive and commitment, his capacity to innovate, his fierce desire to build the best designed and crafted vessels using the best people, and his seasoned business acumen are embedded deep in the DNA of Austal, and it will serve the company well as we go forward. Ladies and gentlemen, I feel it appropriate today to offer John Rothwell a hearty applause. When some familiar faces have departed, there are some new faces on the Board with the appointment of Richard Gibb and Sue Murphy since our last AGM. Both Richard and Sue possess important skills and well round out our Board and have already hit the ground running, ladies and gentlemen, and making substantial contributions to the Board. I want to thank them and the remainder of the Board for their hard, hard work. Thank you all very much. Lastly, I want to thank Austal's staff.
As I've moved about Austal's operations over the last 12 months, it has become abundantly clear that we have staff and management who are energized, smart, innovative, and hardworking. As a result, they're delivering some of the most amazing vessels to our clients and to keep us safe as we go forward. I'm looking forward to the next 12 months as we build on the foundations that we have laid. Thank you very much, ladies and gentlemen.
Good afternoon, everybody, and nice to see some familiar faces in the audience. As Richard outlined, I plan to talk a little bit about what's happened last year, what's happening in the business today, outline where I think the business is going, importantly provide guidance around EBIT for the current financial year, and then finish with a new video at the end to help highlight some of the amazing things that are happening at Austal. I'm sure many people in the room are very familiar with Austal, but you know, at a glance, last financial year we did about $1.8 billion in revenue. As Richard said, EBIT pretty much doubled in the year and is progressing very well. Simply outstanding order book.
For those of you that have followed Austal for a long time, you will know that a good order book for us used to look like $2 billion or $3 billion. Sat here with $13 billion, predominantly in the U.S. today, with Australia set to follow through the Strategic Shipbuilding Agreement, is really an amazing achievement for the team and puts a whole lot of certainty into the business that we just have not had before. In the year, seven ships are ordered and we continue to deliver with seven ships, and that order book translates to 49 ships in construction or ready to commence construction.
We continue to see growth in the support business with 73 vessels under sustainment contracts and an ability to keep growing that segment of our business as we deliver more ships, and we seek to invest in facilities that will enable Austal to service ships that were perhaps not built by us. 4,700 employees, and again, big growth coming here in Perth with the Strategic Shipbuilding Agreement and big growth coming in the U.S. with things like the Module Manufacturing Facility and the big steel ships that we've won over there. Really exciting time for us, growing defense prime contractor with lots of opportunity ahead of us. If we look at the results we delivered in FY2025, those of you can see that, that's greens right across the board and some quite significant increases.
Every financial measure that we find important and we report on, we improved last year and this year is set to improve again. Indeed, with that order book, we've got the runway to carry on improving the financial performance through the revenue, through the profitability of the business for years and years to come. That's based on what we've won or what the government have announced. That's not me standing up here being optimistic about what we could do in the future. It really is a phenomenal position that we find ourselves in. For us, it's important to keep delivering on financial expectations. We do that through delivering on our commitments in the shipbuilding and support world, keeping our customers happy. That translates into the financials to keep our shareholders happy. We're very focused on the long-term growth. We're building that sustainable growth in the business.
You see it coming through the order book. We're ready to invest in facilities. Now is the right time to do it. We're getting tremendous support in the U.S. from the government to invest in facilities. Here in Australia, you'll have heard the Deputy Prime Minister Richard Marles talk about the levels of investment that they're going to make in the Defence Precinct right where we are in Henderson, ready to deliver the Strategic Shipbuilding Agreement and the ships that come with it. Really thinking about the long-term growth and making sure that we keep the shareholders happy who have supported us for many, many years. That slide that Richard mentioned in his speech, 2025 was just a phenomenal year. There are, I can't even call out the bits I like the most because there were so many good things that we managed to achieve last year.
Whether it was contract awards, whether it was delivering ships, whether it was cleaning up historical issues, some great additions to the Board. As the business continues to grow, we're adding strength and depth to the Board, and we're in a very good position to deliver on the strategy that we have set out in front of us. Lots of ships coming, both in defense and in the commercial world. Great to see orders returning to the Philippines and Vietnam. Some really exciting ships in terms of lower emissions, green technology, technology that's very important in the commercial world tomorrow that could be very important in the defense world in coming years. Austal being able to demonstrate we're familiar with the technology, we've already integrated it. Defense, we're still a very good partner for what's coming in the future.
All of the order book growth underpinned by a couple of big successful financial events, you know, an oversubscribed capital raising and Christian leading a debt restructure as well, really setting the company up with all of the firepower it needs to go and execute the strategy and deliver on the order book that we have won. Even more announcements, you know, since we did results in August, you know, fantastic to get the TATS request for equitable adjustments settled and some $92 million payment that came with that settlement. If you thought the company financials were in good shape at the full-year results, you know, we're on track to have another strong set of results at certainly the half year. Export Finance Australia finalizing the loan.
What's really important about that, you know, support from a government agency here in Australia for an Australian company to go and make investments in the United States. Building on that AUKUS theme, building on that relationship between the United States and Australia with great government support, you know, whether it's the National Reconstruction Fund or whether it's Export Finance Australia, our links with government are as good and as strong as they ever have been, and fantastic to see them leaning in to support a great Australian company. Of course, those of you that like reading, we published our ESG report, you know, quite an impressive report, I think, and all the preparations in place and underway for integrating that with the annual report next year, as will be required.
Thinking about that ESG report, you know, a lot of the focus for us is around emissions and what we can do. Whether that's the material we use to build ships in steel rather than aluminium as we move more towards defense, or whether that's some of the really exciting projects that we have underway with the Vela cargo sailing ship, or whether it's the Gotland vessel that will be the biggest ship we've ever built, you know, an LNG hydrogen-ready vessel being built in the Philippines. A very, very exciting project for us and very pleased to win that.
Not only is it about green technology for us and lower emissions, sustainability in the business, technology we're putting in, the investment we make in people, some of the support we give through charity work, and, you know, helping out local needy and good causes right across all of our facilities. You know, this happens in Vietnam, this happens in the Philippines, this happens in the U.S., this happens in Australia. We try our best to work with our community and be good corporate citizens. Again, in the report, some really exciting details of that work that we do with the community and with charities. I often get asked, Strategic Shipbuilding Agreement, what is it? I'll talk about that in a minute, and why Austal? In my mind, these figures speak for themselves.
Our shipyard down the road here in Henderson, 269 ships delivered, and I think in the last seven years, something like 38 ships delivered out of that shipyard at a time where no other ships really have been delivered in Australia. Maybe two ships in the last seven years or something like that, the OPVs with Larsen. Again, years late, way over budget, but Austal, with its incredibly skilled workforce, its very strong core, we find ways to overcome problems. We deliver on our commitments, that's why you see the volume of work. I think that Australian presence, that U.S. presence, the volume of ships we've delivered over the last 37 years, it becomes very obvious why the Commonwealth chose Austal as their strategic shipbuilder here in Western Australia. What does it mean? For me, this is one of the most defining moments in the company's history.
This puts longevity and certainty. This makes a binding formal relationship with the Commonwealth of Australia. This gives us that 20-year look ahead across four classes of programs. Just an incredibly exciting time. This is not all about Austal. The Commonwealth have entrusted us to work with the supply chain to develop the capability here in Australia in a really sensible way. Starting with the landing craft medium, reasonably small simple vessels, building into the landing craft heavy, bigger, more complex, significant more tonnage and volume of work that goes into those, to make sure that Western Australia is then ready for the Mogami-class general-purpose frigates with Mitsubishi.
Following that down select, you will start to see more and more media about Austal working with Mitsubishi, Austal being the strategic shipbuilder, working with Mitsubishi to build the first three vessels over in Japan, and then bringing that technology, transferring it back here to Australia, ready for the eight vessels to be built here in Henderson. An incredibly exciting time. We have really gone all in with the Commonwealth. They have gone all in with us. We've given them a golden chair, an option over the shipyard if there was ever to be a change in control that they did not like the look of, just demonstrating that depth of relationship and that commitment we've made to each other. It's going to be a very, very exciting time, and as I said, that Strategic Shipbuilding Agreement really is a game changer for Austal here in Australia.
What does it look like? Today we're building evolved Cape-class vessels, and we believe that will continue. We've got long lead orders for another two vessels. In the Defence Strategic Review and the Fleet Review that followed, they announced that they think 11 vessels are required for the Australian Border Force. They've been a great customer of ours for years. We support their vessels up in Cairns and Darwin, and I would anticipate we get two vessels awarded every year. That aluminium production line continues alongside what's coming through the Strategic Shipbuilding Agreement. Guardian-class patrol boats are coming to an end, two boats left to deliver. It's been an amazing program started way back in 2015 or 2016. Boats have just popped off a production line every couple of months, and the team have really done a phenomenal job. Importantly, steel-hulled vessels. We have capability.
We have had capability in steel for many, many years. Moving to steel vessels through the medium landing craft, the heavy landing craft, and into Mogami, not something that concerns us. We're doing it today. We've done it for years. We're absolutely ready for it. I think most excitingly, building Mogami-class here, these are proper warships. These are about 140 meters long. These are big complex vessels. Very, very exciting for Western Australia. We don't have a picture of it because it hasn't been designed or not even a concept at the minute, but optionally crewed surface vessels. If you worried what we're going to do after 15 years, there is a program at the back end that has already been announced. We've just never had forward visibility like this. There'll be investment to be made. We think it will come from the government.
They have announced they would like to be the owner of the Defence Precinct in the same way they are in Osborne in South Australia. I anticipate Austal will be the shipbuilder that's put into that yard to operate, maintain, and build the ships in it. Not a huge amount of capital required for that program, but with the strength of the balance sheet, we've made it really clear to government that we are prepared to lean in. We are prepared to invest in a long-term program. If there are things that we can do quicker than they can do, let's work together to get the right answer for defense personnel. Let's get these ships delivered. Let's get the facilities created, and let's really cement this Strategic Shipbuilding Agreement. If we look at Asia, I talked about what's happening predominantly in the commercial world. Very exciting time.
We've had some challenging years with our yards over there, post-COVID and a lack of orders. With the volume of vessels we've now won, we have tremendous opportunity to ensure these yards are profitable for years to come. Commercial work will probably be a relatively small percentage, maybe 2% or 3% of our overall revenue of the company, just with how successful we've been in the defense and the support world. We have the capability, and as I talked earlier, having that ability to demonstrate technology integration in the commercial world and bring it into defense, I see it strategically important. When we've got the yards, when we've got the capability, let's use them. Let's win the work. It will all add to the bottom line, and that is something that's very, very important.
You see a tremendous capability with the size of the facility we built some years ago, and then the large floating dock we've got out the front of the facility that we predominantly use for launching vessels, but starting to use it to generate more revenue in the sustainment world as well. Vessels in that region that need support, we can bring them to our yard. We can lift them out of the water. We can do more sustainment work, all part of that strategy to keep growing all aspects of our business. Looking at what is the biggest facility we've got, Richard gave you some of the statistics around the sheer size of the buildings that we're building. These are going to generate tremendous revenue and opportunity for growth in the future.
Whether it's the ship lift you see there, the sheds that we will consolidate, the new steel vessels, predominantly the offshore patrol cutters and the Tactical Auxiliary General Ocean Surveillance vessels, or the submarine module manufacturing facility, the United States gifting us $450 million is, again, unprecedented. I could use that word a lot in this presentation, but a phenomenal capability has been gifted to Austal. It hasn't been talked about publicly, but I like to think this is an AUKUS circle. Australia has written a big check to the United States, funded by the taxpayers, to get access to Virginia-class nuclear submarines and SSN AUKUS in the future.
The United States has written a very large check to an Australian company, Austal, to build a facility that will build submarine modules that will go on the Virginia-class submarines that will then come to Australia. This is very important to us, and we are very proud that we are a major cog in that wheel of AUKUS and helping support the submarine production and what it can do for Australia. Obviously, it's fantastic for the revenue, the skills capability that we have, and a good area of growth, and maybe something we'll look at in the future here in Australia if we're doing it in the United States. We are one company, and we can transfer that technology and might give us more opportunities in the future. In the top right, you can see the start of the facility going up.
The groundworks are done, and any of you that have built will know that's probably the hardest bit of the job. As the skeleton of the building goes up, the cladding goes up, we will be working very hard to get that building as operational as soon as we can. All of this is underpinned by global defense spending. This is a slide you can read at your leisure and not one that I'm going to take you through line by line, but rising political tensions, the world is certainly not getting safer every day. We've seen more conflicts than any of us would have anticipated and not the ones we were expecting. There is a big focus on modernization.
A lot of the Western world is realizing that we have not invested in shipbuilding capability, shipbuilding capacity, and looking at most of the most contentious regions, absolutely Navy is front and center of what our armed forces think is required to defend our nations. There are big commitments to alliances. You know, we talked about AUKUS. We've seen Australia exercising with the United States, with Japan, with the Philippines. We've seen Australia make a big commitment to Japan by choosing the Mogami class, and it feels like a very exciting time for Austal in terms of how we're positioned with our facilities in Asia, our presence in the U.S., and of course, headquartered here in Australia. The defense thematic has very much helped the growth of the company and doesn't feel like it's going to back off anytime soon.
These programs that are being committed to take years to build. The size of these ships that we're talking about are two, three-year builds per ship, and governments are making commitment to eight, five, eleven ships. These are very long-dated programs. Capturing this work now, it's highly unlikely this will go away or change in the future. It just puts that longevity in the business that really, really excites us. For me, looking forward, a great set of financial results, really great performance last year, and another strong performance anticipated this year. The order book underpins so many decisions that we can make. Whenever there's a year or two look ahead, very hard to make serious financial commitments that will take years to pay back. With this long-dated order book, the company is committed to investing in what will be a very, very bright future.
You've seen some of the pictures of what we're doing in the U.S. and how we'll work with the government here in Western Australia. AUKUS we've talked about. Just scratching the surface on that, maybe today we're building a few modules for submarines. You talk about AUKUS Pillar 2, which is around technologies and transfers. You'll remember from last year, we talked about the autonomous demonstrator that we did, the Sentinel, where we took an old Armidale, put a Greenroom local company technology on that vessel, and it was able to sail itself up and down the West Coast without anybody needing to touch the controls. Autonomy is a key theme of AUKUS Pillar 2, and as Austal, we've demonstrated both in the U.S. and here in Australia, we're ready, willing, and able. We have the capability.
When people decide what that technology, what that platform looks like, we're absolutely ready to go on it. Brings us into other areas, technology. AUKUS Pillar 2, again, 3D printing, additive manufacturing. We operate the U.S. Navy's Additive Manufacturing Centre of Excellence just outside Washington, DC, a couple of hours outside Washington, DC. Walking into that building is like looking at the future. Components that used to be cast in a dirty, dangerous environment that would take maybe 18 months to complete a series of components, we're now demonstrating these things can be printed in a matter of weeks. When there's a real need for speed to capability, working with the U.S. Navy, we are absolutely demonstrating that technology. Austal is right in the center of it again, and that is another technology under AUKUS we will look to bring here to Western Australia.
That partnership with the government is something they very much enjoy, that we can learn the lessons, we can transfer the technology with what we've done in the U.S. back to Australia or what we're doing in Australia over to the U.S. The whole defense spend, you know, we had a whole slide on it, but I don't see it going away anytime soon. That leads me on to be able to give guidance for this financial year. I'm really pleased to say that we're putting guidance out at $135 million. That's actually record EBIT guidance that we're forecasting. Previous record was $130 million back in FY2022. You see the strength of the company. You see the confidence of the teams and the Board.
That record order book, the Strategic Shipbuilding Agreement, the volume of work coming through in Asia, really everywhere I look in the business, I see performance and I see opportunity for growth. Very pleased to be able to come to you today with our record EBIT guidance. I'll finish with a video and give you a bit of an insight into what's happening at Austal. Ladies and gentlemen, that represents the end of the LCS line. 19 ships produced. LCS 38 will be commissioned and handed over to the U.S. Navy at the end of this year. Now it's time for questions on anything that Paddy put up on the Board. What I ask, if you have a question, could you please stand up? You'll be given a microphone. If you could state your name and then ask the question, we'll find you the appropriate answer.
Thank you. Anne Pryor. Congratulations, Paddy. A wonderful result. As a shareholder who's been on your register for 19 years, I have to say it's been a long time coming. Just two questions, and one might be somewhat of a Dorothy Dixer. What's the difference if you've got emissions, say, from like-for-like ships, one aluminium, one steel? What's the difference between them in terms of the emissions? The second question is, I've been reading quite a lot about the automotive industry in the U.S.A. that's been badly impacted by a fire in a large aluminium facility. Do you have any problems with supply chain of aluminium?
I'm going to hand that to Paddy.
Yeah. Simplistically, and there's a couple of my Senior Engineers in the room who'll correct me afterwards if I get this wrong, you know, aluminium's about one-third the density of steel. There is a significant saving whenever you consider the force and therefore the engine power and fuel required to propel a steel ship versus an aluminium ship. We see aluminium as a great product because it's lightweight, it's efficient in terms of its fuel use, and the less dense the material, these ships hit higher in the water. Certainly, things like the littoral combat ship are ideal in aluminium because they can get into much shallower ports. Going forward, some of the vessels and the roles that they will undertake, Navy, both in the U.S. and here in Australia, have decided that steel is more appropriate for those vessels.
We'll carry on with the Capes, as I talked about, and aluminium. The company will retain the capability to build in both steel and aluminium. Certainly in the future, when we think about autonomy and optionally crewed vessels, without that need for ballistic protection and that speed that could be so advantageous, we see there's a real opportunity for aluminium in the future. In terms of the supply chain, no, I don't think we've seen major problems with the aluminium supply chain. We use quite specialist aluminium, which only comes from a couple of places, you know, marine-grade aluminium that we use. We're not anticipating any major supply chain issues at the minute. As I said, we are moving more and more towards steel, so there would be less impact in the aluminium supply chain.
Good afternoon. Rose Ferguson, representing the Australian Shareholders Association, representing 16 shareholders today, representing about 249,000 votes. We'd like to congratulate Austal on a strong year and many, many highlights. Well done. We'd also like to express our sincere best wishes to John Rothwell for his retirement and congratulate him on the legacy that he has left in Austal. A couple of queries we do have. ASA members were disappointed this year that the equity raising in March limited the share purchase plan for retail shareholders to only 10%, and that in fairness, the percentage should have been at least equal to the retail investors' share proportion. Can you comment on why the retail investors were disadvantaged?
I think it's always a balance between the volume of shareholders and the ability of them to deploy capital. What was really important to the Board was that we did give the shareholders a chance to participate in that scheme. Whether we got the % right or not, you don't think so, it's a difficult decision. The important part for us was that every shareholder could participate in the raise.
Thank you. Our other question you're probably sick of hearing, but it relates to Hanwha. We are still waiting on news about the FIRB approval. Do you have any updates and should we have any concerns if approval is granted?
We are not privy to any more information than you. We saw the Treasurer make a commitment to make a decision in October, and we saw October come and go. No, we don't, sorry, September it was. No, we don't have any insights. We've asked Defence if they can give us any insight into timescales or the decision, and the answer is we'll find out when everyone else finds out when the Treasurer makes a decision. Unfortunately, not much there to share with you. Whether it goes one way or the other, I guess for the last year, Hanwha have owned 19.9% of Austal, whether it's directly or indirectly, and we haven't seen any adverse effects on the company. We will continue to execute on the strategy.
As you can see from the results, it certainly hasn't distracted us in any way, shape, or form, and we'll carry on running our business. If a decision is made, we will deal with that decision at the time and any consequence that comes from it.
I'd like to put a finer point on that if I could. From the minute they announced their investment in Austal, Paddy and I sat down and met with the President of Hanwha Marine, who kept promoting the fact that he was after a partnership. We asked him, could you please present to us the value add that you will bring to a partnership for Austal? To date, we have still not received one document supporting the value add of Hanwha to Austal, and I want you shareholders to know that. We are working for the value of the shareholders. We will explore everything we can. In the case of Hanwha, we have heard nothing.
Thank you for your time today, and please note our appreciation for the release of both the annual report and the ESG report at the same time this year.
Any other questions? Okay. I now move to the next item on the agenda, which is the Director's Report and the Financial Statements of the Company. The annual financial statements of the Company for the year ended 30 June 2025, were released to the ASX on 29 August 2025. There is no voting on this item of business. Instead, shareholders have the opportunity to ask questions about those reports. Are there any questions? No questions? We'll now proceed to the resolutions to be considered at this meeting. All resolutions will be put to a poll. However, there will be an opportunity to ask questions relating to each resolution before the poll is taken. I will ask a representative from the Company's share registry to conduct the poll at the end of the meeting after all resolutions have been considered. Resolution number one is for the adoption of the remuneration report.
The resolution is set out on the screen next to me, and I'll give you a moment to read it. I note that a vote on this resolution is non-binding on the Company. The proxies shown on the slide beside me have been received in respect to this resolution. Although I'm personally excluded from voting on this resolution, I will vote the undirected proxies I hold in favor of the resolution. Are there any questions regarding this resolution? Thank you. We'll now move to Resolution number two. Resolution two concerns the election of Richard Gibb as Director. The resolution is set out on the screen next to me. I and the rest of the Board recommend Richard's election as a Director of Austal. I will vote the undirected proxies in favor of the resolution. Are there any questions? Yes.
While we acknowledge and respect the relevant experience of Mr. Gibb, we are concerned about having two non-executive directors from the same substantial shareholder and subsequently an additional non-independent non-executive director on the Board. We will be voting against this resolution, but would welcome any comments regarding this concern.
In the light of the Board, we are looking for the best, most well-rounded candidates to fill the role, and Mr. Gibb checks so many of the boxes that we needed the expertise to fill. Any other questions? Thank you. Resolution number three concerns the election of Sue Murphy as a Director. The resolution is set out on the screen next to me. I and the rest of the Board recommend Sue's election as a Director of Austal Limited. I will vote the undirected proxies in favor of the resolution. Are there any questions? Thank you. Resolution number four concerns the approval of the Employee Share Plan. The resolution is set out next to me on the screen. I will vote the undirected proxies in favor of the resolution. Are there any questions regarding this resolution? Thank you. We'll now move to resolution five, six, seven, eight, nine.
Deal with the issue of share rights to some of the non-executive directors of Austal Limited. At the last five annual general meetings, shareholders approved the grant of share rights to non-executive directors so that participating directors will be remunerated through a combination of 75% cash and 25% share rights. Resolutions five, six, seven, eight, and nine seek shareholders' approval to continue the grant of share rights for the 12 months following this annual general meeting. Resolution five concerns the approval of the issue of share rights to Lee Goddard. I and the rest of the Board recommend the approval of the issue of share rights to Lee. I will vote the undirected proxies in favor of this resolution. Are there any questions of this resolution? Thank you. Resolution number six concerns the approval of the issue of share rights to Kath Tui.
I and the rest of the Board recommend the approval of issues of share rights to Kath. I will vote the undirected proxies in favor of the resolution. Are there any questions concerning this resolution? Thank you. We'll now move on to seven. Resolution seven concerns the approval of the issue of share rights to Brent Cubis. I and the rest of the Board recommend the approval of the issue of share rights to Brent. I will vote the undirected proxies in favor of the resolution. Are there any questions concerning this resolution? Thank you. Resolution number eight concerns the approval of the issue of share rights to Richard Gibb. I and the rest of the Board recommend the approval of the issue of share rights to Richard. I will vote the undirected proxies in favor of the resolution. Are there any questions concerning the resolution? Thank you.
Resolution nine concerns the approval to issue share rights to Sue Murphy. I and the rest of the Board recommend the approval of issues of share rights to Sue. I will vote the undirected proxies in favor of this resolution. Are there any questions concerning this resolution? Thank you. We'll now move to Resolution number ten. Resolution ten concerns the approval of issues of LTI rights to Mr. Paddy Gregg. The resolution is set out before you on the screen next to me. I and the rest of the Board recommend voting in favor of the resolution. I will vote the undirected proxies in favor of this resolution. Are there any questions related to this resolution? Thank you. We'll now move to Resolution 11. Resolution 11 concerns the ratification of the prior issue of placement shares in March of 2025. This resolution refreshes the Company's 15% placement capacity.
The resolution is set out for you on the screen next to me. I and the rest of the Board recommend voting in favor of the resolution. I will vote the undirected proxies in favor of the resolution. Are there any questions concerning this resolution? Thank you. I now direct that the poll will be held in relation to each of the resolutions. Lyndall Weston from MUFG Corporate Markets, Austal's share registry provider, will conduct the poll. I retain the right to make all final decisions on who may vote, the votes cast, and the declaration of the results of the poll. I ask Lyndall to come forward and announce the directions in relation to the conduct of the poll procedures.
The persons entitled to vote on this poll are all shareholders, representatives, and attorneys of shareholders and proxy holders who hold yellow voting cards. Please indicate on this card how you wish to vote by marking the appropriate square for resolutions one through to 11. You must mark either the for or against box for your votes to count. If you wish to cast some of your votes for the resolution and some of your votes against the resolution, you must write the number of votes you are casting in the for box and again write the number of votes you are casting in the against box. The sum of votes cast for or against the resolution must not exceed your voting entitlement. If you are a proxy holder, a summary of the votes to which you are entitled has been provided with the voting card.
If you only have directed votes, you need to do nothing other than submit the voting card. Votes at your discretion or open votes are shown in the column titled Votes Open on your proxy summary and can be cast at your discretion by marking either the for or against box. Once you have finished marking your card, please place it in the ballot box that is circulating the room. If you need assistance, please ask one of the MUFG staff walking around the room now. Thank you.
Thank you.
Thank you, sir.
Thank you.
Have you done yours?
I don't have a piece of paper.
How many questions did you have last year?
From all she asked, I was probably maybe 10 to 15.
Mum was a bit of a stupid font number in your report, wasn't it?
I know.
Because for three and a half hours of questions.
I'm fucking reckless here.
I think that's fair.
Yeah.
They're all pretty happy, obviously. Things aren't as good.
Yeah.
I know exactly this is the year we're in.
If you can't figure it out this year, you're never going to get it right.
I haven't got it.
You don't have to check it out later. You've got as much as you want.
Yeah, exactly.
Yeah.
I just.
Yes.
I believe all those persons who wish to vote in the poll have now done so. If there's anyone present who has not yet completed their paper poll collected by MUFG, please raise your hand. No hands are present. Everyone's voted. If all persons have now voted, I declare the poll closed. I do not intend to keep the meeting open while the poll results are collected. Results of the poll will be announced to the ASX as required. There being no further business, I now declare the meeting closed, and I would like to thank you for your attendance. I would now like you to join us for afternoon tea and refreshments and also be advised, unfortunately, we must vacate the premise by 5:00 P.M. Thank you all very much.