Green Hydrogen Systems, a provider of electrolysis solutions for the production of green hydrogen, has announced a revision to its operating profit guidance for 2023.
The company has made significant modifications to its Series A electrolysis plant, which will result in an operating loss of DKK 240-280 million, compared to the previous guidance of DKK 210-240 million.
In a statement, Green Hydrogen Systems explained that the modifications were necessary to enhance product quality and reliability. These changes encompass adjustments to materials, components, and production processes, albeit at an increased production cost. The company expressed its commitment to delivering high-quality products and ensuring the long-term performance of its electrolysis plants.
To implement the modifications, Green Hydrogen Systems will make the necessary changes to current backorders, while already delivered electrolysis plants will undergo a thorough inspection before the modifications are implemented. This meticulous approach underscores the company’s dedication to customer satisfaction and its commitment to upholding the highest standards in the industry.
The decision to revise the operating profit guidance stems from various factors, including the inflationary pressures on raw materials, components, and labor costs. As a result, Green Hydrogen Systems anticipates costs of approximately DKK 80 million in 2023, with around 50% of these costs considered non-recurring. However, the company expects to mitigate approximately DKK 45 million of these costs through the phasing out of selected activities.
Looking ahead to 2024, Green Hydrogen Systems foresees that the negative impact of rising production costs will be offset by higher sales prices and other measures. The company remains confident in its revenue expectations of DKK 120-160 million and capital investments of DKK 270-300 million.