VEEM's Financial Update for FY25

VEEM (ASX:VEE) has issued a trading update for the first half of FY25, revising its financial expectations. The company now forecasts revenue between $33 million and $35 million, with EBITDA ranging from $3.4 million to $4.0 million. The net profit after tax is expected to be between $0.4 million and $1.2 million, a downward revision from previous predictions due to unforeseen costs and delays.

Summary and Future Outlook for VEEM

VEEM has revised its financial guidance for the first half of FY25, citing unexpected challenges. The company anticipates revenue between $33 million and $35 million, EBITDA between $3.4 million and $4.0 million, and NPAT between $0.4 million and $1.2 million. To address these challenges, VEEM has implemented several cost-reduction measures and received a $1 million government grant for manufacturing upgrades. Looking ahead, the company expects the second half of FY25 to see a return to normal margins and profitability, driven by contributions from defense, new shaftline orders, and increased propeller revenue. VEEM also remains financially stable with an extended $5 million bank loan. The company will host a webinar to discuss these updates with stakeholders.

Executive Commentary on Revised Forecast

Challenges in the first half included lower defense and ASC revenue, leading to a reliance on industrial products that did not meet margin expectations. Additional costs were incurred due to non-recurring issues such as incorrectly machined parts for gyrostabilisers. We have amended our processes to better control and monitor cost overruns and ensure quality. Several cost reduction measures have also been implemented, including staff reductions in specific areas to improve margins.