ITM posts heavy losses but increases electrolyser output

A record number of electrolysers have left green hydrogen pioneer ITM Power’s factory over the last six months despite losses soaring to £94.2 million for the full year, the company’s delayed annual results show.

Sheffield-based ITM, which produces electrolysers that use electricity to split water into hydrogen and oxygen, has had a troubled 12 months that has seen the departure of long serving CEO Graham Cooley and the axing of a quarter of its headcount.

In a statement, the company’s chair Sir Roger Bone described ITM’s operational and financial performance as “unacceptable” as it has struggled to scale up production to cope with an anticipated explosion in demand for electrolysers.

The AIM listed company’s electrolysers are widely regarded as state of the art and key to delivering the UK government’s target of at least 5GW of green hydrogen by 2030.

The results, the publication of which were delayed last month at the request of the company’s auditors Grant Thornton, show an adjusted EBITDA loss of £94.2 million, more than double last year’s figure of £39.8 million.

However the company said the loss was in line with the company’s expectation of £85 million to £95 million, as were revenues, which were down slightly from £5.6 million last year to £5.2 million in the 12 months ending April.

ITM still had net cash at the year-end of £283 million, which while down on the 2022 figure of £366 million was described by Bone as a healthy position that exceeded the company’s expectations.

The company’s recently appointed CEO Dennis Schulz said in his statement that recent hikes in electricity prices, which are the key factor determining production costs of the low carbon gas, had led to a slowdown in green hydrogen projects, giving ITM “breathing space” to tackle production bottlenecks.

He added that he was proud that the last six months have seen more electrolysers leave ITM’s than in any other equivalent period during the company’s 22-year history. Improved testing processes has enabled the company to ease bottlenecks in its Sheffield factory.

According to the results, ITM expects losses to narrow next year to around £50 million and for revenues to increase to around £15 million as the company opens its new factory in Germany, where it is supplying the electrolysers for two new large green hydrogen projects.