• Revenue down 30% to $23.4m, loss after tax of $19.5m
• Propulsion revenue down 9%, defence sales down 49%
• Impairment expense of $24.8m on gyro-related assets
• $14m capital raise strengthens balance sheet

VEEM Ltd reported a 30% decline in revenue to $23.4m and a loss after tax of $19.5m for the first half of FY26, compared to a profit of $1.0m in the prior corresponding period. Earnings before interest, tax, depreciation and amortisation (EBITDA) were down 104% to ($0.2m). Propulsion revenue (excluding defence) was down 9% to $12.9m due to a softening in the propulsion market, while defence sales overall were down 49% to $3.7m largely due to delays in orders from ASC. The company recorded an impairment expense of $24.8m in relation to gyro-related capitalised development costs and obsolete inventory. During the half-year, the company raised $14m (before costs) through a share issue, strengthening its balance sheet and providing flexibility to pursue growth opportunities, particularly in the US defence market. The company continued to invest in research and development, including on the new VEEM Extreme project, finalisation of the gyrostabiliser Mark III range, and projects related to engineering and propulsion products. Cost reduction measures were also implemented, resulting in a $3.5m reduction to overheads on an annualised basis.

VEEM expects FY26 to be a transition year as it navigates through a period of development, with costs incurred in bringing new products to market and entering new markets, while revenues from these endeavours are yet to ramp up. Defence revenue is expected to accelerate in 2HFY26, underpinned by orders from ASC and continuing work with Austal. Propulsion revenue is also expected to increase in 2HFY26 and beyond, supported by the launch of the VEEM Extreme range and ongoing business development efforts.

VEEM expects profitability to be enhanced in future periods as revenues from its new product and market initiatives ramp up. The company continues to have a robust core foundry and engineering business, which has remained resilient and is expected to continue delivering consistent revenue and margins. In the gyrostabiliser business, the launch of the Mark III model is expected to drive increased sales, which were subdued in 1HFY26 by purchase hesitancy awaiting the new model.