UK-based PEM electrolyser maker ITM Power this morning issued its third profit warning in the past eight months, stating that revenues will be lower and losses higher than previously expected.
In a statement, the company said that an ongoing review into the company’s operations by CEO Dennis Schulz — who joined ITM on 1 December 2022 — has made it clear that the results for the current financial year, ending on 30 April 2023, “will be materially different from the current guidance, with lower revenue and a higher EBITDA loss [earnings before interest, taxes, depreciation and amortisation].
The previous profit warning, issued in October 2022, declared that revenue was likely to be towards the bottom of a guidance range of £23m-28m ($28m-34m).
“The main factors which will impact the outcome for the financial year relate to losses on customer contracts, legacy commitments for earlier product generations causing on-site support costs, warranty provisions, and inventory write-downs originating from iterations of product designs during manufacturing,” says the new company statement.
“Projects that are nearing contract closing are impacted as costs were underestimated when prices were originally negotiated and committed to.”
It added: “All the issues we have encountered are surmountable, appreciating that the changes will require focus, time and diligence.”
ITM’s share price immediately fell 16% to £87 after the profit warning was issued, before recovering slightly, to around £91 — a far cry from the high of £682 seen in early 2021, and the £394 at the end of 2021. That represents a fall of more than 75% in just over a year.
“This is the challenge I was expecting when I joined ITM,” said Schulz. “For the company to develop from an R&D and prototyping entity, to a mature delivery organisation, we require firmer foundations.
“Our 12-month plan [to be presented on 31 January] will make ITM a stronger, more focused and highly capable company. The large-scale opportunities in the market are yet to come, and by putting these foundations in place ITM will be ready for the significant market demand ahead of us."
The statement adds that the company had net cash on its balance sheet of £318m on 30 October last year. But the previous profit warning, released on 27 October, stated that the net cash was expected to be £240m-270m at the end of the financial year.
The company filed an Ebitda loss of £39.8m in the year up to the end of April 2022, which had widened from £21.4m the previous year.
The PEM electrolyser maker, which currently has 1GW of annual manufacturing capacity in Sheffield, pared back its aggressive 5GW expansion plans last year due to the “current business climate and cost escalation”.
Plans for a new 1.5GW UK gigafactory have now been put on hold, with ITM planning to instead add some of that capacity to its existing plant in Sheffield, northern England.
