Mr. Randy MacEwen reports
BALLARD REPORTS Q1 2021 RESULTS
Ballard Power Systems Inc. has released its consolidated financial results for the first quarter ended March 31, 2021. All amounts are in United States dollars unless otherwise noted and have been prepared in accordance with international financial reporting standards (IFRS).
$1.3-billion cash reserves supports increased and accelerated investment;
- Strong market interest reflected in high level of commercial activity.
"Supported by a strengthening policy backdrop and increased customer engagement, we have clearer line of sight on long-term growth in our core medium- and heavy-duty motive applications of bus, truck, rail and marine," said Randy MacEwen, president and chief executive officer. "As a result, 2021 will be marked by increased and accelerated investment ahead of market tipping points. Bolstered by a fortified balance sheet, we will deepen our investments in talent, technology, products, advanced manufacturing, localization and customer experience."
Mr. MacEwen continued: "In Q1, we delivered revenue of $17.6-million, gross margin of 15 per cent and ending cash reserves of $1.27-billion. Although the China market remained muted while awaiting further policy pronouncements, activity levels were high across the entire Ballard organization. Indeed, on the commercial front, we witnessed unprecedented customer and industry engagement across our markets."
Mr. MacEwen added: "We are pleased with the growing underlying interest for fuel cell buses in Europe, including follow-on orders from Wrightbus and Solaris. In the truck market, we progressed our co-development work with the Weichai-Ballard joint venture in China and with MAHLE on a fuel cell engine for the European market. Furthermore, yesterday we announced a strategic collaboration with Linamar, focused on powertrains and components for the class 1 and 2 vehicle market in North America and Europe. We have also announced a collaboration with Chart Industries for the joint development of integrated liquid hydrogen storage and fuel cell solutions for heavy-duty vehicles. We launched several rail programs during the quarter, including a fuel cell locomotive program with CP in Canada, a switching locomotive program in California and a passenger train program in Scotland. We also initiated design work for a large-scale propulsion system for a marine customer in Australia and announced our membership in the Hydra Consortium for development of fuel cell systems to power heavy-duty mining equipment."
Mr. MacEwen further noted: "On the technology and product development front, we continued to make measured progress on our key development programs, including ongoing work with our Weichai-Ballard JV in China. We are also tracking ahead of plan on our '3x3' fuel cell stack cost reduction program, enhanced by breakthrough designs and performance from our MEAs and bipolar plates, continued progress with our supply chain and implementation of advanced manufacturing initiatives."
Mr. MacEwen concluded: "All indicators are that we will be set up for strong long-term growth as a result of the accelerated investment we are making this year. We also continue to assess strategic acquisition opportunities that will reduce customer friction points and simplify the customer experience."
Q1 2021 financial highlights
(all comparisons are with Q1 2020 unless otherwise noted)
Total revenue was $17.6-million in the quarter, a year-over-year decrease of 26 per cent or $6.3-million, the result of lower power products and technology solutions revenue.
- The power products platform generated revenue of $9.4-million in the quarter, a decrease of 25 per cent or $2.8-million:
Heavy-duty motive revenue was $6.9-million, a decrease of 33 per cent or $3.4-million, due largely to lower product shipments to China;
- Material handling revenue was $1.7-million, an increase of 148 per cent or $1.0-million, primarily the result of higher fuel cell stack shipments to Plug Power;
- Backup power revenue was $800,000, a decrease of 39 per cent or $500,000 due primarily to lower shipments of fuel cell stacks for backup power in Asia.
The technology solutions platform generated revenue of $8.2-million in the quarter, a decrease of 29 per cent or $3.4-million, due mainly to lower amounts earned from the Audi program.
- Gross margin was 15 per cent in Q1, a decline of six points due primarily to lower revenue and a shift toward a lower overall margin product and service revenue mix.
- Cash operating costs (2) increased by 22 per cent to $14.3-million in the quarter, resulting from increased expenditure on research and product development.
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (2) was($14.0)-million, compared with ($8.8)-million in Q1 2020, primarily as a result of the decrease in gross margin, increase in cash operating costs and higher equity loss in the Weichai-Ballard JV.
- Net loss and adjusted net loss were ($17.8)-million in the quarter, increases of 36 per cent.
- Net loss per share (2) and adjusted net loss per share (2) were (six cents), increases of 12 per cent.
- Cash used by operating activities was ($15.7)-million, an increase of 56 per cent, reflecting cash operating loss of ($10.3)-million and use in working capital of ($5.4)-million.
- Cash reserves were $1,270.9-million at March 31, an increase of 600 per cent from the end of Q1 2020 and an increase of 66 per cent from the end of the prior quarter, driven by net $527.3-million of cash raised in the quarter from a bought deal offering. Ballard also made a further capital contribution of $3.0-million to the Weichai-Ballard JV in the quarter.
- During Q1 Ballard received $11.8-million in new orders and delivered orders valued at $17.6-million, reducing the order backlog by $5.8-million from the prior quarter, ending Q1 at $112.0-million. The 12-month order book was $73.1-million at end Q1, a decrease of $10.4-million from the prior quarter.
Q1 2021 operating highlights
Announced that the company's PEM fuel cell technology and products have powered fuel cell electric vehicles, or FCEVs, in commercial heavy- and medium-duty motive applications for an industry-leading cumulative total of more than 75 million kilometres on roads around the globe.
Announced receipt of follow-on purchase orders from Wrightbus for a total of 50 fuel cell modules to power fuel cell electric buses -- FCEBs -- planned for deployment in a number of United Kingdom cities.
- Received follow-on purchase orders from Solaris Bus & Coach S.A. for 10 fuel cell modules to power buses in the Netherlands.
- Announced that Ballard is powering the first-ever FCEB -- designed and built by Global Bus Ventures -- in New Zealand.
- Recognized Van Hool NV, a long-time bus OEM (original equipment manufacturer) partner in Belgium, for its selection as a qualified provider of FCEBs for deployment in France.
Subsequent to the quarter, announced a strategic alliance with Linamar Corp. for the co-development and sale of fuel cell powertrains and components for class 1 and 2 vehicles, weighing up to five tons.
Announced that Canadian Pacific (CP) will employ 1.2 megawatts of Ballard fuel cell modules for North America's first hydrogen-powered line-haul freight locomotive.
- Received a purchase order from Arcola Energy for fuel cell modules to power a passenger train planned for demonstration during COP26, to be hosted by Glasgow City in November, 2021.
- Subsequent to the quarter, announced that Ballard will provide fuel cell modules to Sierra Northern Railway to power a zero-emission switching locomotive in Northern California.
Announced a non-binding memorandum of understanding with Global Energy Ventures in Australia, for the development of a new fuel-cell-powered ship -- called C-H2 Ship -- designed to transport compressed green hydrogen.
Signed a non-binding MOU with Chart Industries for the joint development of integrated system solutions that include a fuel cell engine with onboard liquid hydrogen storage and vaporization for heavy-duty vehicles.
- Subsequent to the quarter, announced Ballard's membership in the Hydra Consortium -- together with Mining3 and ENGIE -- focused on enabling heavy-duty mining mobile equipment to run on renewable hydrogen, displacing diesel and decarbonizing the mining sector.
- Subsequent to the quarter, issued Ballard's environmental, social and governance (ESG) report 2020, highlighting the company's performance in a number of key areas and demonstrating a continuing commitment to transparency and environmental leadership in the fuel cell industry.
For a more detailed discussion of Ballard Power Systems' first quarter 2021 results, please see the company's financial statements and management's discussion and analysis, which are available on the company website, on SEDAR or on the SEC website.
Ballard will hold a conference call on Tuesday, May 4, 2021, at 8 a.m. PT (11 a.m. ET) to review first quarter 2021 operating results. The live call can be accessed by dialling 1-604-638-5340. Alternatively, a live audio and slide webcast can be accessed through a link on Ballard's homepage. Following the call, the audio webcast and presentation materials will be archived in the earnings, interviews and presentations area of the investors section of Ballard's website.
About Ballard Power Systems Inc.
Ballard Power Systems' vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, passenger cars and forklift trucks.
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