• Revenue of $33.6m, down 10% on 1HFY24 but up 23% on 1HFY23
• EBITDA of $3.9m and NPAT of $1.0m, down 43% and 71% respectively on 1HFY24
• Cashflow from operations of $1.8m, down 50% on 1HFY24

VEEM Limited (ASX: VEE), a designer and manufacturer of disruptive, high-technology marine propulsion and stabilisation systems, has reported its financial results for the half-year to 31 December 2024. The company's revenue for the half-year was $33.6m, down 10% on 1HFY24 but up 23% on 1HFY23, with FY24 being a year of record growth for VEEM. Total activity for the half-year (Sales + change in WIP) was $34.5m, down 13% on 1HFY24, due to a decrease in defence revenue which was down 15% due to the cyclical nature of the work, particularly the submarine program. In addition, orders expected in 1HFY25 were delayed and will now be fulfilled in 2HFY25, bolstering revenue. EBITDA and NPAT were $3.9m and $1.0m, down 43% and 71% respectively on 1HFY24. Margins were impacted by new work won in engineering products and services which was specialised and complex and did not generate gross margins as expected. Repeat work in 2HFY25 is expected to lead to an improvement in margins. Cashflow from operations was $1.8m, down 50% on 1HFY24 due to lower EBITDA and is expected to improve in 2HFY25. VEEM and Sharrow have agreed on a plan to accelerate the design process to ultimately arrive at a position of being able to produce SHARROW by VEEM propellers at volumes that will support sales to B2B customers. Propeller sales maintained the momentum from FY24 and while sales of $14m were down 10%, they are up 28% on 1HFY23. Contracts for propeller supply were signed with three large superyacht builders in Italy and there was a commencement of supply into a major Korean yacht builder. Increased scope of supply for Volvo has also commenced. Gyro sales for the half-year were $3.3m down 35% on 1HFY24 as the accelerated Strategic Marine order was completed. A $1m defence grant to build sovereign capacity was awarded via the Defence Industry Development Grants Program - Sovereign Industry Priorities Stream. Cost reduction measures were implemented during the half-year, including reducing staff in certain areas, which are anticipated to contribute to increased margins in 2HFY25.

VEEM expects revenue, EBITDA, and NPAT to improve in the second half of FY25 compared to the first half, with delayed orders and increased cyclical defence work feeding into 2HFY25 and repeat orders from challenging new industrial work completed in 1HFY25 expected to yield better margins.

VEEM expects the second half of FY25 to be better from both a revenue and margin perspective, with delayed orders and the increase in cyclical defence work feeding into 2HFY25 and repeat orders from challenging new industrial work completed in 1HFY25 expected to yield better margins in conjunction with cost reduction measures implemented.