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(Alliance News) - ITM Power PLC shares plunged on Thursday as it warned its loss is likely to widen, owing to the knock-on effects of manufacturing delays, which also jeopardise the future of some of its large-scale projects.
The energy storage and clean fuel firm creates hydrogen energy technology to boost the take-up of renewable energy.
ITM warned that annual output and revenue are likely to be towards the bottom of the current guidance range, due to manufacturing issues.
Its shares plummeted 31% to 71.60 pence on Thursday morning in London. The stock is down 82% in 2022 so far.
The issues include delays in the finalisation of tooling and testing of its latest generation of stack modules. The previously announced guidance range was 48 to 65 megawatts of delivered product and revenue of GBP23 to GBP28 million.
"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 GBP3 million at [financial 2022] year end and may result in a revision to [loss before interest, tax, depreciation and amortisation] guidance," ITM explained.
In September, it had guided for an adjusted loss in Ebitda between GBP45 to 50 million.
At that time, it reported its pretax loss widened substantially to GBP46.7 million in the financial year that ended April 30 from GBP27.6 million, as revenue rose 32% to GBP5.6 million from GBP4.3 million.
"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," ITM said.
Accordingly, it warned of delays in the finalisation of contracts, which could place some large-scale projects at the 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," ITM said.
It also said the search for a new chief executive officer is progressing well, after Graham Cooley announced in September that he would step down from the role after 13 years.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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