The Veem Ltd (ASX: VEE) share price is deep in negative territory on Tuesday afternoon following the release of the company's first-half results.

After disappointing investor expectations, the marine technology company's shares have fallen by 13.64% to trade at 76 cents each at the time of writing.

Veem reports weakened result for H1 FY22

The Veem share price is heading south today following the company's performance for the six months ending 31 December 2021. Here are some of the key highlights:

• Total revenue of $26.3 million, down 7.4% on the prior corresponding period (H1 FY21 $28.4 million)
• Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $2.9 million, down 49% (H1 FY21 $5.7 million)
• Net Profit After Tax (NPAT) of $0.3 million, down 90% (H1 FY21 $3 million)
• Earnings Per Share (EPS) of 0.2 cents per share, down 91% (H1 FY21 2.3 cents per share)
• Unfranked interim dividend of 0.0007 cents per share.

How did Veem perform in H1 FY22?

As foreshadowed at the company's annual general meeting (AGM), there were a number of factors that impacted the above results.

The first was the company vigorously competing for staff in a very tight labour market caused by border closures. This means that Veem has been unable to recruit many skilled tradespeople when needed. This, in turn, constrained capacity (production hours) and increased costs through payment of overtime and higher wages.

In addition, raw materials price increases have eroded margins, particularly the bronze (copper and nickel) used for propellers.

The company has also been impacted by a surge in freight costs and shipping times which have affected its margins.

At year's end, Veem had a cash balance of $4.6 million and an undrawn overdraft facility of $3.4 million.

What's the outlook for Veem?

Looking ahead, Veem is confident that it can continue driving growth of its gyrostabiliser product in the global marine market.

Notably, the company is the only major supplier in the large marine gyrostabiliser market. The total addressable opportunity is valued at US$1.1 billion for new builds and US$13.5 billion for retrofits.

Management noted that its significant investment and ongoing development provides a major barrier for entry for potential competitors.

The global demand for propellers is expected to remain robust, with Veem already increasing its manufacturing capacity last month.

The company expects sales of propellers to increase in line with capacity and also be boosted by price rises.

In addition, Veem's defence revenue is expected to remain strong. Deliveries under the upcoming Collins Class submarine full cycle docking are scheduled to commence in April 2022.

Nonetheless, investors have sold off the Veem share price after the company advised that revenue over the next period will likely be similar to the first half. This is due to the tight labour market, rising raw materials and freight costs, freight and supplier uncertainty, and COVID-related issues.

The company refrained from providing earnings or profit guidance for the FY22 full year.

Veem share price snapshot

The Veem share price is down more than 19% year to date and almost 16% over the past 12 months.

The company has a current market capitalisation of around $103 million.

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The Veem Ltd (ASX: VEE) share price has taken off today after the company provided a gyro sales update.

At the time of writing, the marine technology company's shares are up 7.21% to 92 cents. However, despite the strong gains made today, its shares are down by more than 20% in a month.

Veem provides sales update

The Veem share price is pushing ahead after the company announced a strong order book since its 17 November update.

In today's release, Veem advised that it has received six orders for its gyrostabilisers, worth $2.2 million. This brings the total orders in hand to $5 million, with $1 million expected to be delivered this month.

Veem noted that the order book includes repeat purchases from three prestige boatbuilders for the luxury superyacht market. Namely, the customers are Alia in Europe, and Westport and the United States.

Furthermore, Damen – a Dutch defence, shipbuilding, and engineering conglomerate company – has started a marketing campaign for the use of VEEM Marine gyrostabilisers on its FCS 5009 vessels.

Currently, Veem has a 3-year agreement with Damen for the supply of gyros as an option onboard its FCS workboats.

The company also appointed Dennis Bravenboer as its new head of sales & business development in Europe. Mr Bravenboer will start the role in January 2022 and oversee the European marketing and sales division.

What did the managing director say?

Veem managing director Mark Miocevic commented:

We are pleased, but not surprised, to land these new orders in rapid succession over the last few weeks. Based on our leads and enquiries, we are very confident the orders will continue to increase through the second half of FY2022.

The Damen marketing campaign to introduce and recommend the VEEM Marine gyros, and in particular the VG520SD, to their client base is a great step forward for VEEM in the commercial markets with Damen being such a highly regarded shipbuilder.

We are very pleased to have been able to secure the services of Dennis Bravenboer to drive our European sales and marketing program for VEEM Marine. Dennis' background in the sales and marketing of engineered marine products is outstanding and with our support we expect him to hit the ground running in 2022.

Veem share price summary

The Veem share price has gained almost 40% in the past 12 months and is around 10% higher year-to-date.

Based on the current share price, Veem commands a market capitalisation of $125.54 million, with 135.72 million shares on issue.

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The VEEM Ltd (ASX: VEE) share price has broken an all-time record today. At the time of writing, shares in the marine technology manufacturer are trading at $1.32 – up an incredible 14.78%.

The rise comes after the company announced the federal government has placed an order with it for $9 million worth of submarine refurbishments.

Let's take a closer look at today's news.

What's affecting the VEEM share price?

In a statement to the ASX, VEEM says it has already received $3 million, and expects another $6 million, from government enterprise ASC Pty Ltd "in relation to the next full cycle docking for the Collins Class [submarine] maintenance program."

VEEM says the contract is based on a "sophisticated scheduling approach" that takes into account uncertainties from COVID-19 and future metals prices.

The company claims this will provide more certainty to ASC and allow VEEM to better forward plan. Work will begin within the next financial year with the first deliverables due by July 2022.

The order is similar to one ASC placed with the company in March 2020 – also for $9 million. The VEEM share price increased 5.4% on that day.

Management commentary

VEEM managing director Mark Miocevich said of today's news:

The new order from ASC is further demonstration of our reputation for precision engineering to the exacting defence standards of the Royal Australian Navy. This order will provide certainty to our planning and positively impact our profitability in the 2022 and 2023 financial years.

VEEM share price snapshot

Over the past 12 months, the VEEM share price has risen by around 217%. Unlike many other ASX companies, VEEM did not experience significant financial shock relating to the pandemic. So arguably, the increase in its share price could be attributed to genuine business growth rather than a rebound from the COVID-driven market sell-off.

While servicing the defence industry is an important segment of VEEM's business, it is not the only one. The company's value shot up by around 7% in March after it announced partnerships with Italian superyacht builders.

VEEM has a market capitalisation of around $168 million.

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The Veem Ltd (ASX: VEE) share price is climbing in early-afternoon trade after the company provided a gyro sales update.

At the time of writing, the marine technology company's shares are up 5.8% to $1.08. This puts its shares within a whisker of its all-time high of $1.15 reached earlier this month.

Sales update

The Veem share price is racing higher as investors appear pleased with the company's presence in the Italian superyacht construction market.

According to its release, Veem advised that it has received orders for its gyro stabilisers from two Italian clients, Rossinavi and Overmarine. This marks the first time the company has added these two prestigious superyacht builders to its books.

Overmarine, a designer and builder of superyachts for more than 30 years, produces luxury and long-range yachts branded Mangusta. The Italian boat maker ordered 2 Veem gyros for its new Mangusta 165.

Rossinavi, on the other hand, an Italian manufacturer of custom steel and aluminium superyachts. The luxury yacht builder is seeking to purchase one Veem gyro for its new superyacht design.

While Veem did not reveal the value of the orders, it stated that its order book stands at $5 million. Around $3.5 million of the gyros is expected to be included in sales during the current half.

Addressable market opportunity

Veem highlighted the "huge" market opportunity for its gyros, referring to a report published by Super Yacht Times. The article noted 710 vessels were in the global superyacht construction order book on 1 January 2021. This represents an addressable market of more than $260 million in sales for Veem gyros.

In addition, the company said that there is a total of 9,233 vessels around the world that are considered superyachts. Over the past year, this number grew by 1.7%. Veem hopes to capture this market through retrofitting its gyros on the existing fleet of superyachts.

What did the managing director say?

Veem managing director Mark Miocevic commented:

We expect orders to continue once customers have experienced the benefits of the significantly greater stabilisation and demand VEEM Gyros as part of their new builds.

Having orders in hand already to deliver $3.5m of sales this half gives us confidence that the trend of significant sales increases year on year will continue.

Mr Miocevic said the superyacht fleet represented a huge market for VEEM Gyros, both in the new constructions underway and the retrofit potential.

Our current sales, while growing rapidly, are only a small portion of the potential within the superyacht, commercial and defence addressable markets.

About the Veem share price

The Veem share price has gained more than 130% in the past 12 months and around 30% year-to-date.

Based on the current share price, Veem commands a market capitalisation of $140.4 million, with 130 million shares on issue.

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The Veem Ltd (ASX: VEE) share price is soaring 14% in early afternoon trade.

The sharp gains come following the company's release of its results for the first half of the 2021 financial year.

Veem is a marine technology company that produces propulsion and stabilisation systems for private, commercial and government vessels.

What results did Veem report?

In this morning's ASX release, Veem provided an unaudited update on its expected results for the half year to 31 December 2020. It said the audited results will be released later this month.

The company reported revenues of $28.4 million for the half year. That's up 36% from the previous corresponding period.

Earnings before income, tax, depreciation and amortisation (EBITDA) of $5.7 million were up 111% from the first half of the 2020 financial year. Veem noted that figure includes $1.5 million it received from the government's JobKeeper program.

Net profit after tax (NPAT) posted a 233% increase from the previous corresponding period, reaching $3.0 million.

The company said its gyrostabilisers sales were particularly strong, with the $3.6 million in revenue up 73% from the previous corresponding period.

Earnings per share (EPS) of 2.3 cents were up 229%.

Commenting on the results, Mark Miocevich, Veem's managing director said:

The continued increases in sales of VEEM Gyros with minimal increase to the overhead burden should continue to see the business generate strong EBITDA and cash flow. Across the business, and within Gyros, propulsion and defence specifically, we continue to see evidence of strong sales and profit potential for the rest of 2021.

VEEM is in the strongest position it ever has been with an existing robust core business which has allowed us to invest and support our focus on the rapid growth of our disruptive VEEM Gyro product into the global marine market. Following the signing of the framework agreement with Damen, one of the largest European shipbuilders, we are now on the cusp of delivering on what we have known for some time is a game changing opportunity.

Veem share price snapshot

Veem shares have been a star performer over the past year. The company proved highly resilient to the COVID-19 market rout, with the share price falling less than 6% from late February through to 23 March.

Over the past 12 months the Veem share price is up 79%. In 2021, shares are up a more subdued 2.4%.

By comparison the All Ordinaries Index (ASX: XAO) is flat over the past 12 months.

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The Veem Ltd (ASX: VEE) share price hit an all-time high in afternoon trade today after the company released a positive sales update.

The Veem share price climbed to a record high of 88 cents but has since retreated to 84.5 cents as it nears close of trade today.

Based in Perth, Western Australia, Veem designs and manufactures marine propulsion and stabilisation systems for global luxury motor yacht, fast ferry, commercial workboat and defence sectors.

The company's market leading gyrostabilisers (gyros) significantly reduce the rolling motions of vessels in waves. In turn, this enables sea-time in rough conditions and also helps reduce sea-sickness.

What did Veem announce?

The company has achieved its sales target, with revenue recorded at $3.6 million for the half-year ending 31 December. The company sold 8 gyrostabilisers in what has been a growing market since 2018.

At current, the company's order book has $3.9 million worth of products. In comparison, the corresponding period in 2018 achieved just over half a million in revenue.

Veem said that almost all gyros sales were for superyachts, offshore supply vessels and charter boats. However, there were some retrofit sales to Damen – a Dutch defence, shipbuilding, and engineering conglomerate company based in the Netherlands. This included an offshore supply vessel in the Gulf of Mexico and a local West Australian charter boat.

After demonstrating the capacity of its new gyro facility, the VG1000SD, the company sold 2 units to Damen. Currently, Veem has a 3-year agreement with Damen for the supply of gyros as an option onboard its FCS workboats.

In addition, Mexican offshore contractor, Naviera Integral, will use the new gyro onboard its Damen FCS vessel in sea trials next month. Both companies have a strategic alliance together where Damen provides workboats to Naviera Integral.

Words from the managing director

Veem managing director Mark Miocevich welcomed the performance, saying:

We are very pleased to see the sales of VEEM Gyros continue to increase strongly and to have delivered on our guidance provided to the market for the first half of FY21.

Given our level of inquiries, orders in hand, the Damen frame agreement and increased capacity in our Gyro facility, we expect this sales trend to continue.

About the Veem share price

The Veem share price is breaking new ground today after bottoming out at a multi-year low of 37 cents in June last year.

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