REG - ITM Power PLC - Trading Update

ITM PowerAnnouncement

27/10/2022 07:00

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RNS Number : 2578E  ITM Power PLC  27 October 2022

27 October 2022

 

ITM Power plc

("ITM Power" or the "Company")

 

Trading Update

 

As outlined in the final results, ITM Power, the energy storage and clean fuel
company, continues to make encouraging technological progress with the
development of the 2MW MEP 2.0 stack. This latest generation of stack modules
represents a step change in performance and operating efficiency, and the core
technology continues to perform very well, delivering high conversion
efficiency and market leading current density.

 

Due to manufacturing issues including delays in finalising the tooling and
testing of these stacks, the Company now expects that full year output and
revenue is likely to be towards the bottom of the current guidance range. The
timing of this revenue will be weighted towards the final quarter of the
current financial year, and will be dependent on success of the current work
to resolve these issues. The previously announced range is 48MW-65MW of
delivered product and revenue of £23m-£28m.

 

These production issues have resulted in limited deliveries of new, first of
kind product which in turn has meant only limited field data for performance
to assess the level of warranty provisions. As a consequence of the limited
field data, the warranty provision for these next generation contracted
products will need to materially increase from the current level of £3m at
FY22 year end and may result in a revision to EBITDA loss guidance. The
accuracy of the product warranty provision will improve as more field data is
acquired. This is evolving technology and by its nature that creates inherent
uncertainty applicable to any company introducing new technology into a
rapidly developing industry.

 

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. The Company remains
fully committed to the successful delivery of the order backlog and is working
closely with customers to get projects finalised.

 

The Company continues to benefit from a strong balance sheet with current cash
of some £320m, and has an increased focus on operational cash and cost
management. Taking into account the committed capital expenditure, a lower
level of inventory build, and cost control the year end cash forecast is
expected to be £240-270m.

 

The search for a new Chief Executive Officer is progressing well.  Further
guidance will be provided as to the current year's revenue and production as
well as warranty provisions in the Trading Update in December.

 

For further information please visit www.itm-power.com
(http://www.itm-power.com/)  or contact:

 

 ITM Power plc
 James Collins, Investor Relations                 +44 (0)114 551 1205

 Justin Scarborough, Investor Relations            +44 (0)114 551 1080

 Investec Bank plc (Nominated Adviser and Broker)  +44 (0)20 7597 5970
 Jeremy Ellis / Chris Sim / Ben Griffiths

 Tavistock (Financial PR and IR)                   +44 (0)20 7920 3150
 Simon Hudson / Tim Pearson / Charlie Baister

 

About ITM Power plc:

ITM Power manufactures integrated hydrogen energy solutions for grid
balancing, energy storage and the production of renewable hydrogen for
transport, renewable heat and chemicals. ITM Power PLC was admitted to the AIM
market of the London Stock Exchange in 2004.

 

ITM Power operates from the world's largest operational electrolyser factory
in Sheffield with a capacity planned to reach 1.5 GW (1,500 MW) per annum and
has an ambition to grow capacity in line with demand to 5 GW per annum,
supported by a £250m equity raise in Q4 2021. Partners include Linde, Shell,
Snam, and Vitol among others.

 

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