ASB has reviewed its US Towing, Salvage and Rescue Ship (T-ATS) program, downgrading EBIT earnings guidance by ~A$42M (from ~A$100M to ~A$58M) as a result. While we believe ASB is well placed to win work, particularly given its new steel capability, we see heightened risk to margin as the Company transitions from mature programs to new. It warrants a degree of caution. A HOLD call (prior BUY) is more appropriate.
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