£1.6bn Sheffield hydrogen firm ITM Power predicted to make first profit in 2025 as orders flood in

A booming Sheffield hydrogen equipment company worth £1.6bn is forecast to make its first profit in three years’ time - 24 years after it started.

Thursday, 27th January 2022, 1:25 pm

ITM Power could make £21.5m EBITDA - a measure of profit - in 2025, according to analysis by Longspur Research.

It predicts annual sales will soar 100-fold from £4.3m in 2021 to £403m by then.

WHY ARE THE PREDICTIONS SO HUGE?

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Dr Graham Cooley, ITM Power CEO, at the Gigafactory on Shepcote Lane.

It will be a huge milestone for the company which was founded in 2001. Since then it has developed world beating equipment and is today inundated with orders from around the world and plans to build two factories after raising hundreds of millions in funding.

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The company issued half-year results for the six months to October 31 which show it made a loss of £12.9m, slightly larger than the £10.4m it lost in the same period the year before.

But it has a ‘backlog and pipeline’ of work valued at £473m - 16 per cent up on the previous year - and £390m cash in the bank after fundraises, including £242m in November.

ITM Power opened the Gigafactory on Shepcote Lane in 2021 - two more are planned.

Longspur Research predicts EBITDA will be in the red - with losses peaking at £42m in 2023 - until 2025 when the first, historic profit could be made.

In a report, Adam Forsyth of Longspur, states: ‘ITM has continued to make progress and the wider market background has continued to develop positively. In Europe the European Commission has adopted the Hydrogen and Gas Market’s Decarbonisation Package which we think marks a clear move of policy to support hydrogen in a net zero future’.

WHAT IS GLOBAL DEMAND FOR HYDROGEN?

ITM Power chief executive Graham Cooley said by the end of 2021 some 39 countries had announced hydrogen strategies and roadmaps and international interest was evident in the contacts and visits by government officials and ministers.

The company has a ‘Gigafactory’ on Shepcote Lane. In November it announced plans for a second, costing £55m and set to create 300 jobs, on the former Sheffield Airport site in Tinsley, which it bought from the University of Sheffield for £13.4m. It is expected to be operational by the end of 2023. A third and even bigger factory, in an as yet unnamed country, is set to open by the end of 2024.

The group has more than 350 employees and expects to hire another 100 ‘as the scale of operations increases’.

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