• Revenue of $23.4m, down 30% on 1HFY25
• EBITDA of -$0.2m, but strong cashflow from operations of $4.0m
• Net debt reduced to $1.8m after $13.1m capital raise

VEEM Limited (ASX: VEE), an Australian Defence manufacturer and designer and manufacturer of disruptive, high-technology marine propulsion and large gyrostabilizer systems, reports its financial results for the half-year to 31 December 2025. VEEM's revenue for the half-year was $23.4m (down 30% on 1HFY25) with total activity for the half-year (Sales + change in WIP) $23.3m (down 32% of 1HFY25) due to low gyro sales and a delay in receipt of ASC orders to late in the half year. The ASC orders are now being fulfilled and will contribute to significantly increased defence revenue in 2HFY26. EBITDA was -$0.2m but cashflows from operations were $4.0m, up 128% on 1HFY25. Net debt of $13.7m at 30 June 2025 reduced to $1.8m at 31 December 2025 after net capital raising receipts of $13.1m. At 31 January 2026 the net debt position had improved further to a net cash position of $0.2m. The company is transitioning through a period of development where costs have been expended in bringing products to market (VEEM Extreme & Gyro Mark III) as well as entering new markets (US Defence) but revenues from these endeavours have yet to ramp up. Propulsion sales (excluding defence) of $13.0m were down 9% on the prior period with the market showing early signs of improvement into 2HFY26. The VEEM Extreme range was launched during the half-year with strong enquiries received. Defence revenue of $3.7m in the half year was down 49% on the corresponding period largely as a result of the delay in receipt of ASC orders until late in the half. The Mark III gyro was launched during the half featuring a patented oiling system and custom low friction bearings. Gyro sales below budget constituted an impairment indicator and an impairment test was conducted, resulting in a non-cash impairment expense of $24.8m.

While we have had a slower start to FY26 than we had hoped, it will be a transition year with 2HFY26 continuing to lay the foundations for a stronger FY27 with costs spent on US defence qualification; gyro Mark III and VEEM Extreme to yield meaningful revenue over time as they ramp up.