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Alfen cuts 2024 forecast on delay in energy storage deals, slowing Europe EV sales

By Nathan Vifflin

Alfen, a Dutch company that provides energy storage and EV infrastructure, cut its revenue and core earnings forecast for 2024 on Wednesday citing a slowdown in its main market and lower sales of electric vehicles in Europe.

WHY IT'S IMPORTANT

A significant number of large deals anticipated for the second quarter have been postponed in its energy storage segment. However, deals closed after the quarter will mostly contribute to 2025 revenue.

In its Smart Grid Solutions segment, moisture defects in its prefabricated concrete housing products caused the company to take a one-off impairment charge of 7.5 million euros ($8.03 million) to cover the impact.

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With EV sales in Europe growing at a slower pace than expected, Alfen also took a modest view for the second half of the year with regards to its EV Charging segment. Additionally, it took an impairment charge of 3.6 million euros in the segment due to obsolete inventory.

MARKET REACTION

Shares fell as much as 43% to 18.11 euros, on track for their worst day ever. Analysts also downgraded their rating.

BY THE NUMBERS

Alfen now expects revenue of 485 million to 520 million euros for 2024, down from 590 million to 660 million euros, and 2024 adjusted EBITDA margin in the mid-single digit percentage.

Alfen also said it expects lower adjusted EBITDA for the year, but did not specify a figure.

The company's two impairment charges totaled 11.1 million euros, and it expects 2024 free cash flow to be negative.

KEY QUOTES

"Alfen expects customer decision-cycles to start to shorten once battery prices stabilize, as demand for EVs increase in line with battery manufacturer's expectations," it said in a statement.

"Increased lead times to obtain and realize a grid connection in countries such as the Netherlands and Sweden are causing further delays," it said, adding that "EV sales are likely to accelerate again in 2025 once affordable models are launched (starting end of 2024, continuing into 2025)"

($1 = 0.9344 euros)

(Reporting by Nathan Vifflin; Editing by Janane Venkatraman and Anil D'Silva)