Ebusco has published its results for the first half of 2024. The net result over the six months came in at €64.7 million negative (H1-2023: €35.8 million negative). Earnings per share changed from a loss of €0.60 per share in H1-2023 to a loss of €0.99 per share. Ebusco is negotiating with banks and shareholders for additional financing and with suppliers for payment arrangements, as financial websites are reporting. The company also mentioned other risks, such as insufficient financing being attracted to implement the reorganization plan.
Disappointing performance to date, have made the Ebusco Management to withdraw the 2024 guidance on 25 June 2024. Inefficiencies at the in-house production facility in its factory in Deurne (The Netherlands) continue to hinder the finalisation of buses, slowing down factory output. Start-up inefficiencies have delayed production compared to the initial plan and will take the remainder of 2024 to resolve, as Ebusco states. To take action, the reshaped Executive Team of Ebusco is developing a Turnaround Plan to improve the overall performance and delivery reliability of the company. Elements are: Simplify operational footprint and establish reactive supply chain; Complete industrialisation of existing product portfolio before launching new products; Gradual increase of run rate to 40-50 buses per month by the end of 2025; Structural reduce OPEX by €20-30 million in 2025. Whether this will be sufficient for a turnaround of the company remains a question. During the Q3 update and the Capital Markets Day later this year, Ebusco will provide a more detailed elaboration of the Turnaround Plan, and an updated guidance for 2024. Additionally, as Ebusco did not manage to catch-up on its bus delivery schedule the company is warning that revenue also remains impacted by reservations for late delivery penalties which are accounted for as a deduction from revenue.
Also Ebusco reports it was not able to satisfy the contracts related to the delivery of the mobile energy containers and energy storage systems which also negatively impacted the revenue. The delayed deliveries did not only affect the revenue recognised from the supply of the company's buses but also delay the revenue from its maintenance and repair contracts. Although Ebusco says it was unable to reach the production output it was aiming for, it emphasizes the strategic shift to re-introduce working with contract manufacturers has proven to be the right choice, resulting in accelerated assembly time. The company notes the first results of the cost reduction programme by means of a significant drop in its overall workforce (including externally hired employees) from 893 FTE per 31 December 2023 to 770 FTE per 30 June 2024, the employee benefit expenses still amount to €33.5 million for H1-2024 (H1-2023 €30.2 million). Given the significant absolute FTE decrease (893 to 770) the company expects the financial impact to be significantly present in the remainder of 2024. The other operational expenses amounts to €15.2 million in the first half of 2024 (H1-2023: €10.6 million). The increase compared to H1-2023 is according to Ebusco mainly caused by higher distribution costs, and higher general costs due to an increase in advisory costs.