ITM Power Shares Tumble as Earnings, Revenue For FY23 Expected to Be Worse Than Forecast

ITM Power (LON: ITM) shares plunged Monday after the company said it has “become clear” that the outcome for its financial year ending April 30, 2023, will be “materially different” from the current guidance, with lower revenue and a higher EBITDA loss.

At the time of writing, shares of ITM are down more than 14%.

On December 1, ITM Power appointed Dennis Schulz as its new CEO, with a review of its operations undertaken following the appointment. This resulted in a change in its guidance.

In October, the company said it expected fiscal 2023 revenue to be towards the bottom end of the £23 million to £28 million range as a result of manufacturing issues.

The main factors impacting the outcome for its financial year are losses on customer contracts, warranty provisions, legacy commitments for earlier product generations causing on-site support costs, and inventory write-downs stemming from iterations of product designs during manufacturing.

“All the issues we have encountered are surmountable, appreciating that the changes will require focus, time and diligence,” the company said.

Even so, ITM said its balance sheet remains in a strong position with net cash as of October 30, at £318 million.

“For the Company to develop from an R&D and prototyping entity, to a mature delivery organisation, we require firmer foundations,” commented Schulz. “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.”

ITM is scheduled to post its interim results on January 31, where it will provide further details on guidance.