Electrolyser manufacturer ITM Power has warned it expects to see lower revenue and a higher EBITDA loss than its current guidance predicts.
The company pointed to losses on customer contracts, legacy commitments for product generations causing on-site support costs, warranty provisions and inventory write-downs originating from iterations of product designs during manufacturing as impacting its financial performance.
It added that projects nearing contract closing were impacted as costs were underestimated when the company originally negotiated and committed to prices.
A detailed review of the company’s operations is underway, with further details on guidance and a strategic 12-month priorities plan to be presented with the interim results announcement scheduled for 31 January, 2023.
The strategic update will likely see the company concentrating its portfolio on its core product suite, ensuring robust validation and preparing for manufacturing at scale.
In addition, it will cover ITM Power’s plans for future testing capabilities and automation and a rigorous approach to capital allocation and costs
The company noted that its balance sheet remains in a strong position, with net cash as of 30 October 2022 of £318m.
The warning follows the appointment of Dennis Schulz as the company’s CEO on 1 December 2022.
He said: “This is the challenge I was expecting when I joined ITM. 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 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.”