ITM Power says manufacturing issues likely to affect top line

UK electrolyser manufacturer ITM Power Plc (LON:ITM) today provided a trading update, saying that it now expects full-year output and revenue to be towards the bottom of the current forecast due to some manufacturing issues.

As previously announced, the company was anticipating between 48 MW and 65 MW of product deliveries and revenue of GBP 23 million (USD 26.6m/EUR 26.6m) to GBP 28 million for the fiscal year ending April 30, 2023.

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On Thursday, ITM Power said it is facing production issues including delays in finalising the tooling and testing of its latest-generation 2-MW MEP 2.0 stacks, which is likely to affect its projections. These issues have led to limited deliveries of this new product and consequently limited field data for its performance, meaning that the warranty provision for these next-generation offerings will need to materially increase from the current level of GBP 3 million at the end of fiscal 2021/22 and may result in a revised EBITDA loss guidance, the company warned.

“The Board is aware of the potential risk associated with the growing and uncertain levels of warranty provisions and is seeking to mitigate this portfolio risk. As a result, the Company expects there may be delays in finalising contracts in the final stages of negotiation which could place large scale projects at risk of deferred financial close,” ITM Power said.

The company, which is currently searching for a new CEO, noted it has a solid balance sheet with current cash of some GBP 320 million and an year-end cash forecast of GBP 240 million to GBP 270 million.

(GBP 1 = USD 1.157/EUR 1.155)