Velan Inc. reported a net loss of $9.4 million for the first quarter ended May 31, 2026, reversing from a net income of $17.8 million in the prior year, as sales declined due to geopolitical and regional conflicts. Sales fell to $57.8 million from $72.2 million, driven by deferred shipments primarily from North American and Italian operations, with the majority expected to be delivered by fiscal year end. The company is advancing a transformation plan to optimize operations, modernize facilities, and expand market share across nuclear, defense, and energy sectors to support long-term profitable growth.

"The factors impacting our performance were external in nature, primarily relating to geopolitical and regional conflicts and its effect on our customer activity, order timing, and shipment schedules," said Rishi Sharma, President and Chief Executive Officer of Velan. He added that the company remains positioned to capitalize on pent-up demand in nuclear power and defense, supported by Canada's Nuclear Energy strategy and rising global security concerns driving naval modernization programs.

Financial Performance

The company reported an adjusted net loss of $6.9 million, compared to adjusted net income of $0.1 million in the prior year. Adjusted EBITDA from continuing operations was negative $2.1 million, compared to positive $3.8 million last year, reflecting lower sales and gross profit. Bookings totaled $48.0 million, a decrease from $78.2 million last year, due to challenging market conditions in North America, Italy, and Germany. Gross profit dropped to $11.4 million, or 19.6% of sales, down from $20.6 million, or 28.6% of sales, attributed to lower business volumes and a $1.3 million increase in provisions.

Backlog and Strategic Position

As at May 31, 2026, the backlog stood at $275.1 million, with 70.7% ($194.4 million) expected to be delivered over the next 12 months. The backlog structure reflects a growing share of longer-duration contracts in nuclear and defense sectors. Velan's financial position remained solid with cash and cash equivalents of $34.6 million and short-term investments of $1.4 million. Subsequent to the quarter end, the company secured a new $80 million revolving credit facility maturing in June 2031 to enhance liquidity and reduce its cost of capital, which will be used to accelerate strategy execution and invest in core capabilities.

Velan Hotels Ltd has completed the sale of its hotel property located in Tirupur to M/s. J.P. Associates Asia Pacific Private Ltd for a total consideration of ₹37.16 crore. The transaction was finalized on July 2, 2026, after necessary rectifications were made in the Town Survey Land Register (TSLR) of the property. The company received the sale proceeds in multiple tranches, subject to the deduction of applicable Tax Deducted at Source (TDS).

The disclosure was made to BSE Limited under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This communication follows previous updates provided by the company on January 13, May 1, June 16, and June 25, 2026, regarding the status of the sale. The purchaser, M/s. J.P. Associates Asia Pacific Private Ltd, is a non-related party based in Coimbatore.

Transaction Details

The completion of the registration marks the conclusion of the sale process, which had been pending due to errors in the land records. The company had earlier informed the exchanges about the initiation and progress of this strategic divestment.