ITM shares plunge after additional manufacturing delays

Shares in UK electrolyser maker ITM Energy plunged by a 3rd on Thursday after it flagged additional manufacturing delays, within the newest blow to Britain’s aspirations to determine its personal clear vitality provide chains.

The corporate, which goals to grow to be a number one producer of kit important to the manufacturing of inexperienced hydrogen, stated the hit to output would push revenues to the decrease finish of its £23mn to £28mn forecast for the 2023 monetary yr.

Its shares have been down 34 per cent in morning buying and selling in London on Thursday.

ITM stated that whereas the delays to manufacturing of its new electrolyser expertise made it tough to evaluate the extent of guarantee provisions, they’d “materially improve” above the earlier monetary yr’s £3mn and would possibly result in a revision of its estimate for a full-year core earnings loss.

The most recent hitch takes the group’s market capitalisation under £420mn, having peaked at £3.5bn in early 2021 when hydrogen shares went right into a frenzy.

The announcement additional dents the UK’s hopes of constructing its personal clear vitality provide chains at a time when electrical automotive battery manufacturing hopeful Britishvolt faces a money crunch.

ITM, which is backed by the world’s largest industrial gasoline firm Linde and building tools maker JBC, is hoping to provide electrolysers, machines that use renewable electrical energy to create hydrogen from water.

The revenue warning builds on downbeat outcomes final month when the Sheffield-based group introduced the departure of longstanding chief government Graham Cooley and retrenched on its goal to have 5 gigawatts of manufacturing capability in place by 2024.

Skye Landon, an analyst at Jefferies, stated Thursday’s buying and selling replace “doubtlessly alerts some extra danger within the occasion of additional delays”.

Nevertheless, analysts have stated the corporate’s future has been buttressed by a wave of regulation supporting the event of hydrogen in response to greater vitality costs after Russia’s invasion of Ukraine.

Proponents of inexperienced hydrogen say it could assist decarbonise heavy industries equivalent to steelmaking and chemical compounds, in addition to the heavy-duty transport sector.

However the pace of the rollout of fresh vitality expertise has been thrown into doubt. The troubles for ITM spotlight the rising pressures going through smaller firms trying to make inroads into battery and clear vitality manufacturing provide chains at a time of rising inflation and rates of interest.

Regardless of the pressures, the corporate lowered its expectation for money burn for the complete yr by £15mn due to value management, bringing it right down to between £95mn and £120mn. Because of this, it expects to finish the monetary yr with £240mn to £270mn of money.