TCN Media & Investor Newsletter | AL3, DRO and ASB

Global security took centre stage at the June 2025 NATO summit where member states agreed to raise defence and security-related spending to 5 per cent of GDP by 2035 - a sharp increase from the previous 2 per cent target set in 2014.

The pledge was largely driven by US President Donald Trump’s longstanding push for greater allied defence contributions. Whilst countries like Poland and the Baltic states welcomed the move, others such as Spain voiced concerns over financial pressures and the potential impact on their domestic programs.

Nevertheless, the new benchmark underscores NATO’s sharpened focus on global security amidst ongoing conflicts, including the war in Ukraine. This policy shift also shines a light on defence-sector businesses listed on the ASX.

AML3D (ASX: AL3)

AML3D (ASX: AL3) is a specialist metal technology company which uses its patented Wire Additive Manufacturing (WAM) process to produce complex industrial components through its ARCEMY systems.

In essence, the group’s technology enables 3D printing of metal components for the defence, oil and gas, and aerospace sectors, where highly specialised parts are often needed urgently but not readily available.

In turn, AML3D’s ARCEMY systems can be deployed and operated onsite, allowing for the rapid production of critical components directly from 3D computer models using a variety of metal alloys.

AML3D recently opened its new US Technology Facility in Stow, Ohio, which could mark a significant milestone in strengthening America's defence manufacturing as well as supporting the trilateral AUKUS partnership between the US, UK, and Australia.

The new manufacturing base also represents a key cog in the company’s growth strategy, arming AML3D with domestic production capabilities to support the US Navy’s submarine programs.

The facility’s official opening was attended by defence industry leaders and representatives from federal, state, and local government, highlighting its strategic importance to both economic development and national defence in the US.

"This facility enables us to support all three AUKUS nations while strengthening the allied defense industrial base through advanced manufacturing technologies developed in Australia and now deployed in America." - Sean Ebert, AML3D CEO

Furthermore, AML3D recently strengthened its leadership team with the appointment of Frederick J. Stefany to the board of its American subsidiary.

Mr Stefany is a veteran of the US Navy program, with more than 40 years of experience overseeing research, development, acquisition, and sustainment for the US Navy and Marine Corps across shipbuilding, aviation, weapons, and support operations.

Most recently, he established and served as the inaugural Program Manager of the US Navy’s Maritime Industrial Base, a role focused on strengthening domestic manufacturing capabilities in support of national defence.

DroneShield (ASX: DRO)

DroneShield (ASX: DRO) is an Australian defence technology business specialising in drone detection and security.

It develops AI-based platforms designed to protect against advanced threats such as drones, with its suite of counter-unmanned aerial system (CUAS) hardware and software solutions applicable for both military and commercial purposes.

The company has gained significant traction in its commercialisation push after notching up a string of significant outcomes so far in 2025.

In June, DroneShield secured the largest single order in its history after nailing down a package of three follow-on European military contracts totalling $61.6 million.

These contracts for the group’s handheld detection and counter-drone systems surpass the company’s total revenue in 2024, which stood at $57.5 million.

This European order follows another significant contract win in April. Here, DroneShield locked in a $32.2 million package of five repeat contracts from a military customer in the Asia-Pacific region.

And just last week the company secured a $9.7m package of three standalone contracts for a defence end customer in a Latin American country.

This positive outcome further underscores the growing demand for DroneShield’s counter-drone technology.

“The scale and frequency of orders has been increasing as leading Military customers are moving from testing hardware to broader rollouts. DroneShield is well placed to meet the increasing demand.” - Oleg Voronik, DroneShield CEO and Managing Director

Austal Limited (ASX: ASB)

Austal (ASX: ASB) is a global shipbuilder and defence prime contractor, specialising in the design, construction, and sustainment of advanced commercial and defence vessels.

The company is the world’s largest aluminium shipbuilder and also manufactures both conventional and autonomous vessels in steel and aluminium, as well as a range of other bespoke maritime build programs such submarine modules.

Over its 35-year history, the group has delivered more than 350 vessels to 122 commercial and defence customers across 59 countries.

Notably, Austal is one of only two foreign-owned prime contractors authorised to design, build, and sustain ships for the US Navy. And in this respect, the US represents a key growth market for the company.

Austal continues to invest in its shipbuilding and submarine capabilities with two major expansion projects currently underway in the US: the Final Assembly 2 (FA2) project and the submarine Module Manufacturing Facility 3 (MMF3) project.

In late June, the company completed the final funding piece of its $1.2 billion capital expansion program in America by securing $488 million in credit facilities from a consortium of Tier 1 financial institutions.

The new debt facilities build on Austal’s $220 million capital raise in April designed to expand its US shipbuilding capacity, as well as US$450 million in MMF3 funding from General Dynamics Electric Boat to help fund its capital expansion program.

Austal currently holds a record orderbook of more than $14 billion to produce its vessels, with the bulk tied to US steel shipbuilding programmes and expansion into submarine module production.

“Austal possesses an exceptional pipeline of long-term defence work in the US, which will be complemented by the Strategic Ship Building Agreement in Australia. The Company now has a stronger balance sheet with enhanced liquidity at a lower cost, longer tenor, and with superior flexibility to support this growth.” - Paddy Gregg, Austal CEO