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ITM Power Plc

ITM Power PLC signs first multi-MW contract: £3.5m for 3MW as commercial deals increase in scale

This morning ITM Power PLC (LON:ITM) put out a seminal RNS announcement. It is the first multi-MW commercial deal signed by the company; 3MW of electrolysis hardware with some ancillary hydrogen energy equipment worth £3.5m to ITM. No further information on the deal is being made public at this point, and the company expects to be able to update the market with more details around the transaction in due course.
ITM is experiencing a significant increase in the number of commercial enquiries for its state-of-the-art modular electrolysis platform, and importantly, there is a clear, increasing trend, in the average scale of enquiries. This growing commercial interest is not only coming from potential customers in ITM’s primary target markets of hydrogen fueling infrastructure and power-to-gas (‘P2G’) storage of intermittent renewables, but also from companies active in other industrial mass-markets, including petrochemical refining, steel-making and the chemical industry. ITM will be showcasing a series of large-scale electrolyser configurations up to 100MW at the Hannover Messe later this month, where further significant commercial interest is anticipated.

Zeus Capital expect this seminal, multi-MW order for ITM to be the first of many of similar scale and larger, as the company continues to close deals, grow its top line and move on a trajectory toward breakeven, cash generation and beyond. We see clear value in this stock at current levels.

ITM Power plc currently has £21.8m of projects under contract and £2.9m in final negotiation. This gives a total pipeline of c. £24.7m contracted or in final negotiation subject to exchange rate variation. This healthy pipeline is evidence of ITM executing its strategy of embedding and rolling-out its technology in target markets at this key early stage of market evolution, including scale renewables storage by power to gas (‘P2G’) and hydrogen fueling infrastructure. The pipeline also reflects growing interest from a number of other industrial mass markets such as refining, steelmaking and chemicals.

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