VEEM Posts A$68.6m Revenue in FY25 with 57% NPAT Drop Amid Defence Gains

FY25 Performance – A Year of Consolidation

VEEM Limited’s FY25 results reflect a period of consolidation following record revenues in FY24. The company posted revenue of A$68.6 million, a 15% decline compared to the previous year, alongside a net profit after tax of A$3.0 million, down 57%. However, the second half of the year showed encouraging momentum, with revenue and profitability improving notably, signaling resilience amid cyclical defence contract fluctuations.

Cash flow from operations remained positive at A$4.3 million, supported by a 36% increase in EBITDA in the second half, underscoring operational efficiencies and cost discipline. The company’s net assets also strengthened slightly to A$54.3 million, reflecting a solid balance sheet bolstered by a recent $14 million capital raise aimed at funding working capital and facility expansion.

Defence Contracts – Building a Stronger Backlog

Defence revenue, a key growth driver for VEEM, totaled A$15.6 million, down from FY24 due to the cyclical nature of the ASC contract. Notably, ASC revenue declined by A$9.6 million, partially offset by a rise in other defence projects. A landmark 6-year, A$65 million contract with ASC signed in August 2025 is expected to underpin significant revenue growth in FY26, particularly in the second half as orders begin to flow.

VEEM’s progress on the Hunter Class Frigate Program is a highlight, with demonstrator blades under development and qualification expected by year-end. This achievement positions VEEM as one of only two global suppliers capable of delivering such precision components, opening doors for further Australian and international naval contracts.

Strategic entry into the US defence supply chain was marked by VEEM’s inclusion in the HII AUSSQ Pilot Program and a 9-year Master Labour Agreement with Northrop Grumman valued up to US$33 million. These milestones grant VEEM access to the Virginia Class submarine and aircraft carrier programs, with initial purchase orders already received and further tender opportunities imminent.

Propulsion and New Product Innovation

VEEM’s propulsion segment maintained steady revenue at A$35.0 million, consolidating the record performance of FY24. The company’s traditional propeller business is expected to grow, supported by the launch of the VEEM Extreme propulsion system. This new product boasts up to 18.1% fuel efficiency gains, combining advanced propellers, twisted rudders, and flow-aligned shaft lines made from proprietary high-tensile alloys.

Early validation came with a contract to supply six vessels for Manly Fast Ferries, with further contracts anticipated as testing of rudders progresses. VEEM’s ongoing investment in automation and facility expansion, including the addition of new machinery and a 3D sand printer, aims to enhance production capacity and margin improvement.

Gyrostabilisers and Engineering Services

Gyrostabiliser sales declined to 13 units generating A$9.6 million in revenue, down from 18 units and A$12.3 million in FY24. The company attributes this to customer hesitancy ahead of the launch of the next-generation Mark III gyro, expected to drive accelerated orders in the second half of FY26.

Engineering Products and Services revenue grew 5% to A$16.7 million, benefiting from strong demand and repeat orders. VEEM’s focus on precision-engineered, foundry-led products continues to provide a steady revenue base outside defence and propulsion.

Outlook – Stronger Second Half Expected

VEEM anticipates a challenging first half of FY26 with revenues forecast between A$24 million and A$26 million and a modest EBITDA range from a loss of A$1 million to a small profit. This softness is attributed to delayed defence orders and customer wait-and-see behavior ahead of the Mark III gyro launch.

However, the company expects a robust rebound in the second half, driven by the ramp-up of ASC contract orders, new US defence opportunities, and growing traction for the VEEM Extreme propulsion system. Facility expansions and continued R&D investments underpin VEEM’s strategy to maintain technological leadership and capitalize on expanding defence and marine markets.