Veem (VEE) H2 2025 earnings summary

Executive summary

• FY25 revenue was $68.6 million, down 15% year-over-year, but the second half saw a 4% sequential increase, with EBITDA of $9.2 million and NPAT of $3.0 million, both rebounding strongly in 2HFY25 due to cost reductions and new contracts.

• Cash flow from operations was $4.3 million, down 49% year-over-year, but up 39% in the second half, reflecting improved profitability and backlog catch-up.

• Major defense contracts, including ASC, HII, and Hunter Class, are expected to drive significant growth from late FY26 and into FY27, with a renewed six-year, $65 million ASC contract signed.

• Defence revenue accelerated in 2HFY25, offsetting a reduction in ASC revenue, and supplier status was achieved for the HII US submarine program.

• Investments in robotics, facility expansion, and product development, supported by $3 million in defense grants, position the business for future growth.

Financial highlights

• Revenue for FY25 was $68.6 million (down 15% year-over-year), EBITDA $9.2 million (down 38%), NPAT $3.0 million (down 57%), and operating cash flow $4.3 million (down 49%).

• 2HFY25 revenue was $35.1 million (up 4% sequentially), EBITDA $5.3 million (up 36%), and NPAT $2.0 million (up 100%).

• EPS for FY25 was 2.22 cents (down 57% year-over-year), with 2HFY25 EPS up 100% from 1HFY25.

• Cash on hand at year-end was $0.8 million, with $3 million in undrawn facilities.

• Net assets were $54.3 million, up 4% year-over-year.

Outlook and guidance

• ASC contract work is expected to resume in 2026, heavily weighted to the second half, with a six-year, $65 million extension signed.

• Defence revenue is expected to accelerate in 2HFY26, with Hunter Class and HII contracts progressing and potential for significant ramp-up in FY27.

• Propulsion business is expanding with new products, shaftlines, and facility expansion for added capacity in 2HFY26.

• Gyrostabiliser market growth is anticipated, driven by new product launches and increased market education.

• A slower first half is anticipated for FY26, with a much stronger second half and an even stronger FY27 expected.