An almost quadrupling of revenue and a margin turnaround have failed to give electric vehicle (EV) fast-charger manufacturer Tritium (NASDAQ: DCFC) the financial jolt it needs, leading the company to announce the closure of its Brisbane factory with hundreds of jobs on the line.
After accumulating US$313.4 million ($489 million) in losses over the past three financial years, Tritium shares are now worth 97.9 per cent less than when the Brisbane-born tech company struck a deal with a US-based special purchase acquisition company (SPAC) for an ultimate NASDAQ listing.
In an announcement to the NASDAQ this week, Tritium reported that in the pursuit of achieving profits in 2024 it would be shuttering its Brisbane factory, although there were plans to retain and grow its 200-person research and development team and world-class test facility in Brisbane, along with its global services team and sales force.
"While we continue to build on our recently reported financial results, which include achieving record revenue and gross margin, strategic restructuring of our business is necessary to drive both profitability and shareholder value," says Tritium CEO Jane Hunter.
"This transition is aligned with the company’s plan to be profitable in 2024.
"The implementation of this plan, including the closure of the Brisbane factory and consolidating our manufacturing operations in Tennessee, supports the ongoing market competitiveness and positioning of the company as a world leader in its category, driven in part by the highly successful scale-up of our US plant and the NEVI (National Electric Vehicle Infrastructure) and BABA (Build America, Buy America) programs in the United States, while bringing our manufacturing operations closer to our largest markets."
Hunter notes that these changes will reduce Tritium's capital requirements and hasten the timing of the company becoming EBITDA positive.
In March, Hunter told Business News Australia that Tritium employed around 1,000 staff worldwide, of which close to 600 were in Brisbane including 150 in operational roles at the factory.
The company earned the praise of US President Joe Biden in 2022 and Australian Prime Minister Anthony Albanese earlier this year, but it has struggled to perform financially with a US$121.37 million ($189.2 million) loss in the past financial year despite a 286 per cent surge in revenue in the first half of the calendar year to US$112 million ($174.6 million).
In the six months to June the company reported a gross margin of 4 per cent, compared to negative 18 per cent in the previous corresponding period, while also reporting high uptimes - a measure of how often an EV driver can successfully charge - of 97 per cent for its chargers with BP in Australia and New Zealand, 98 per cent with Evye in the UK, and 97 per cent with Evie Networks in Australia.
Despite the major closure of its Brisbane factory, Tritium asserts investment in technology development, services, software, and sales continue.
Tritium's site in the eastern Brisbane suburb of Murrarie is home to an electromagnetic chamber for testing that is the only one of its kind in the southern hemisphere.
Earlier this year, Hunter explained Tritium was earning around 80 per cent of its revenue in Europe and the US, and around 20 per cent in Australia and New Zealand. For a company that's received significant financial backing from the St Baker Energy Innovation Fund and Brian Flannery's family office Ilwella, she emphasised the importance of patient capital.
"I worked for Boeing for eight years where we did amazing development of the MQ 28 Ghost Bat, so that IP and revenue goes back to the United States. So you’re growing the capability here but you’re not growing the economy in the same way as you are with Australian technology," she said at the time.
"It's too good to pass up the opportunity to take Australian tech to the world and commercialise it and see an Australian technology that we keep ownership of, rather than handing over ownership, which is what happens far too regularly.
"If you keep ownership, you get all of the benefits of homegrown jobs, homegrown manufacturing, growing your R&D and the engineering base and your innovation base here."
At least for the time being, Tritium has kept the latter.
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