In its interim results, the UK-based electrolyser manufacturer is shown to have stood £2m ($2.4m) down in the six months leading up to October 21, 2022, compared to £4.1m ($5m) in the same period in 2021.

Additionally, its losses before tax saw a heavy decline to £56.5m ($69.4m), down from £15.3m ($18.8m) in the previous segment.

Sir Roger Bone, Chairman of ITM, explained that the company had raised capital to pursue an expansion strategy to scale up and transition from and R&D company to a volume manufacturer, however added, ITM set “unrealistic targets” for project completion, and as a consequence has produced an “unacceptable financial performance.”

Little over two weeks ago (January 16) issued a profiting warning, saying it had become clear that the financial year ending April 30 (2023) would see lower revenue and higher earnings before interest, taxes, depreciation, and amortisation (EBITDA).

Read more: ITM Power issues profit warning

ITM said the main factors that looked to be causing the financial situation relate to losses on customer contracts, legacy commitments for earlier generations, warranty provisions, and inventory write downs.

In pursuit of rectifying the financial damage, ITM has set out 12-month priorities to manage costs. Dennis Schulz, CEO of ITM, said, “This requires scrutinising every aspect of the business for cost saving potential, and it will make difficult decisions necessary. One of those is the need to streamline our organisation via a headcount reduction programme.”

The Sheffield-based company has said it will:

Concentrate on its portfolio on a core product suite, with “robust” product validation, and preparing for manufacturing at scale.
Take a “rigorous” approach to capital allocation and cost management, including a headcount reduction, which it says will equate to a 30% (£9m) annualised saving on personnel cost and lead to professionalising engineering and manufacturing, and increasing control over spend.
Plan for future testing capacity and incremental automation, improving cycle times, volume output and build quality.

Schulz commented, “Our detailed 12-month plan will make ITM a stronger, more focused and more 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.”

In better news for ITM, it today announced it had signed two contracts, each for the sale of 100MW PEM electrolysers to Linde Engineering, which are set to be installed at an RWE site in Lingen, Germany.

Planned to be powered by offshore wind, produced in the North Sea, the project is anticipated to be able to produce vast amounts of green hydrogen to decarbonise German industries.

Read more: RWE, Linde partner to create green hydrogen production capacity Linge, Germany

Schulz said the project enables ITM to “scale towards volume manufacturing with certainty and determination.”