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Two more combat ships for Austal

The littoral combat ship USS Independence doing operational work.

UPDATE 1.20pm: Shares in Austal were firmer after the shipbuilder announced the US Navy had agreed to fund the last two ships in its 10-vessel Littoral Combat Ship program.

The go-ahead will add about $US691 million to Austal's order book, boosting it to $3.1 billion.

The US Navy has also signed an option for an 11th Littoral Combat Ship next year.

Austal chief executive Andrew Bellamy said it was pleasing to see the navy's confidence in Austal's ability to produce the vessels.

"We have developed considerable know-how as the LCS program has matured and look forward to constructing the newly funded ships, which secure work at our US shipyard through to 2020," he said.

Austal has seven LCS at various stages of construction at its shipyard in Mobile, Alabama, under the 10-vessel, $US3.5 billion contract the US Navy awarded it in 2010.

The company said it was also progressing well with its $1.6 billion contract to construct 10 Joint High Speed Vessels for the US Navy.

Austal announced this week it had begun laying off 300 workers from its Henderson shipyard as it wrapped up a, eight vessel, $330 million contract for the Australian Customs and Border Protection Service.

Austal shares were up 4.5 cents, or 2.54 per cent, to $1.815 at the close.