- Industrial valve manufacturer, Velan Inc (TSX:VLN) has suspended its quarterly dividend, after reporting a full-year net loss of approximately C$22.81 million
- Net losses in its full-year report have increased when compared to just $6.82 million in the previous year
- Velan attributes the increased losses to a non-cash tax adjustment and costs associated with its restructuring initiative
- Alongside the release of its full-year report, the company has chosen to suspend its quarterly dividends and will revise this decision on a quarterly basis
- Velan Inc (VLN) is up 9.09 per cent and is trading at $5.40 per share
Industrial valve manufacturer, Velan Inc (TSX:VLN) has suspended its quarterly dividend, after reporting a full-year net loss of approximately C$22.81 million.
In its full-year 2020-2019 financials, company’s net losses have increased when compared to $6.82 million in the previous year.
Velan attributes to increased losses to two principal causes. Firstly, a non-cash tax adjustment related to unused tax losses resulted in a charge of approximately $11.41 million.
Secondly, this year Velan’s restructuring and transformative initiative, named V20, cost the company around $13.35 million.
Despite net losses increasing, the company’s full-year sales remain relatively flat, at approximately $516.85 million, up just 1.3 per cent compared to the previous year.
Although the company increased shipments from its Italian operations, a decrease in its North America and French sectors offset these gains.
Alongside the release of its full-year report, the company has chosen to suspend its quarterly dividends until further notice.
Velan stated that the current context warrants the suspension and the company will re-address the decision on a quarter-by-quarter basis.,
John Ball, CFO of Velan, believes the company has performed well, during a challenging year.
“Notwithstanding the fact that fiscal year 2020 was a year of many challenges, with the implementation of the first wave of restructuring and transformation initiatives, it was a year of positive improvements in terms of both sales and operating profit, excluding the restructuring and transformation costs.
“In North America our restructuring efforts are progressing on track and below initial cost estimates while our overseas companies in Europe and Asia turned in very good result,” he said.
Velan Inc (VLN) is up 9.09 per cent and is trading at $5.40 per share at 10:28am EDT.