ITM Power slumps after warning of wider loss from legacy contracts
Investing.com | Author Geoffrey Smith
Published Jan 16, 2023 03:08AM ET
Updated Jan 16, 2023 03:21AM ET
By Geoffrey Smith
Investing.com -- Shares in ITM Power (LON:ITM) slumped at the opening on Monday after the U.K.-based maker of hydrogen fuel cells warned of lower revenue and a wider loss in the current fiscal year.
ITM blamed cost overruns and again flagged problems with early iterations of its products that have had extensive warranty problems.
The shares fell 15% in early trading in response and are now down some 85% from their pandemic-era peak.
The warning comes halfway through a strategic review ordered by new chief executive Dennis Schulz, who took the helm at the start of December.
"Whilst the process is ongoing, it has become clear that the outcome for the financial year ending 30 April 2023 will be materially different from the current guidance, with lower revenue and a higher EBITDA loss," the company said in a statement that hinted at some drastic cost-cutting.
ITM said it expects the review to recommend concentrating on a core suite of products and promised a "rigorous approach to capital allocation and costs."
The company will publish the review's conclusions along with its nine-month update at the end of January.
"This is the challenge I was expecting when I joined ITM," Schulz said in the statement. "For the Company to develop from an R&D and prototyping entity, to a mature delivery organisation, we require firmer foundations."
ITM's saving grace is its cash pile, which still stood at £318 million (£1 = $1.2210) at the end of October.
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