Dutch energy storage specialist and EV infrastructure provider Alfen cut 2024 revenue and EBITDA guidance on Wednesday amid a slowdown in the energy storage market and hurt by lower EV sales in Europe.

WHY IT'S IMPORTANT

A significant number of large deals anticipated for Q2 have been postponed in its energy storage segment. However, deals closed after Q2 will mostly contribute to 2025 revenues.

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

With EV sales in Europe growing at a slower pace than expected, Alfen also took a more modest outlook 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.

BY THE NUMBERS

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

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)

By Nathan Vifflin