MONTREAL – Velan Inc. (TSX:VLN) is increasing its dividend by 25 per cent as the industrial valve maker reported swinging to a profit in its fiscal fourth quarter despite a drop in revenue.
Montreal-based Velan said it earned US$10.4 million or 47 cents a share in the three months ended Feb. 28, reversing a loss of US$3.6 million or 16 cents per share in the comparable year-earlier period even as sales fell 15.1 per cent or US$21.4 million to US$120.7 million.
“I am glad to report our big improvement in earnings and cash flow,” CEO Tom Velan said in the company’s earnings report Tuesday. “We have decided to increase our annual dividend to 40 per share.”
The higher quarterly dividend of 10 cents Cdn per share, up from eight cents, will be payable June 30 to shareholders of record on June 16.
Chief financial officer John Ball said the last quarter provided a strong finish to fiscal 2014, with both good margins and flat administration costs contributing to the bottom line.”
“While we are still feeling the after effects of Fukushima in our nuclear business, particularly in China, the tightening up of our quoted lead times is starting to help increase order intake and net bookings,” Ball said, referring to the disaster at Japan’s Dai-ichi nuclear power plant in March 2011.
“We were also pleased with our advances into the Indian market, where we remain optimistic about longer term opportunities,” he added
For the full year, the company reported net earnings of US$29.4 million or $1.34 per share on sales of US$489.3 million, up from net profit of US$15.8 million or 72 cents per share on sales of US$500.6 million in fiscal 2013.
Velan Inc., with more than 2,000 employees, has manufacturing plants in 10 countries.