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Ballard Power Systems Inc
Symbol BLDP
Shares Issued 297,603,412
Close 2021-08-05 C$ 19.05
Recent Sedar Documents

Ballard loses $21.9-million (U.S.) in Q2

2021-08-05 23:15 ET - News Release

Mr. Randy MacEwen reports

BALLARD REPORTS Q2 2021 RESULTS

Ballard Power Systems Inc. has released consolidated financial results for the second quarter ended June 30, 2021. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with international financial reporting standards (IFRS).

"The second quarter and first half of this year have highlighted our ability to navigate a challenging global environment, while continuing to invest in our business to capitalize on the exciting momentum occurring across the hydrogen sector," said Randy MacEwen, president and chief executive officer. In Q2, Ballard achieved revenue of $25.0-million, gross margin of 15 per cent and ending cash reserves of $1.24-billion.

Mr. MacEwen added: "Global policy announcements supporting decarbonization continue to move at record pace. The Fit for 55 initiative in Europe, and Hydrogen Earth Shot program in the [United States] both represent clear commitments to accelerate the expansion of a clean hydrogen economy. These policies, and with further clarity regarding the China hydrogen and fuel cell policy still to come, will support future order growth from our customers and scaling of our business across key market segments."

Mr. MacEwen continued: "During Q2, we continued to make progress in the execution of our strategy, with significant order growth over [first quarter]. Throughout 2021, we have seen important follow-on customer orders from Solaris [Bus & Coach SA], New Flyer and Tata in the German, California and India bus markets, respectively, as well as meaningful progress with CP Rail and Siemens [Mobility GmbH] in the North America and Europe rail markets, respectively.

"We are pleased to announce the substantial completion of our investment in advanced manufacturing in our Burnaby MEA manufacturing capabilities, including increased MEA production capacity by approximately six times. We believe our increased investment in people, technology, products, proprietary advanced manufacturing capabilities and customer experience position Ballard to support the expected growth of customer deployments. These investments also enable us to maintain technological leadership while reducing product costs as global momentum in hydrogen markets takes hold," concluded Mr. MacEwen.

Q2 2021 financial highlights (all comparisons are with Q2 2020 unless otherwise noted):

  • Total revenue was $25.0-million in the quarter, down 3 per cent year over year:
    • Power products generated revenue of $15.8-million in the quarter, approximately flat year over year.
    • Heavy-duty-motive revenue was $11.0-million, a decrease of 12 per cent or $1.5-million, due primarily to lower shipments of fuel cell products to customers in China.
    • Material-handling revenue was $2.0-million, a decrease of 12 per cent or $300,000, primarily the result of lower shipments to Plug Power.
    • Backup power revenue was $2.8-million, an increase of 125 per cent or $1.6-million, due primarily to an increase in sales of hydrogen-based backup power fuel cell stacks to Europe and Asia, combined with a minor increase in hydrogen-based backup power systems and service revenues in Europe.
  • Technology solutions generated revenue of $9.1-million in the quarter, a decrease of 7 per cent or $600,000, due primarily to decreased amounts earned on certain programs.
  • Gross margin was 15 per cent in Q2, a decrease of six points, driven primarily by the decrease in total revenues, combined with a shift to lower overall product margin and service revenue mix.
  • Cash operating costs (2) were $20.1-million in the quarter, an 80-per-cent increase primarily attributable to increased investments in technology and product development related to work on next-generation fuel cell stacks and modules for bus, truck, rail and marine applications, as well as higher general and administrative expenses.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (2) was ($19.7-million), compared with ($8.0-million) in Q2 2020, primarily as a result of the decrease in gross margin and increase in cash operating costs.
  • Net loss was ($21.9-million) in the quarter, a decline of 104 per cent.
  • Net loss per share (2) was (seven cents), a decline of 68 per cent.
  • Cash used by operating activities was ($17.8-million), an increase of 20 per cent, reflecting cash operating loss of ($12.4-million) and use in working capital of ($5.4-million).
  • Cash reserves were $1.24-billion at June 30, an increase of 630 per cent from the end of Q2 2020 and a decrease of 2 per cent from the end of Q1 2021.
  • During Q2, Ballard received approximately $26.1-million in new orders -- an increase of approximately 120 per cent over the prior quarter -- and delivered orders valued at $25.0-million, thereby increasing the order backlog to approximately $113.3-million at the end of Q2. The 12-month order book was $80.6-million at Q2-end, an increase of $7.5-million from the end of Q1 2021.

Q2 2021 operating highlights:

  • Bus:
    • Received follow-on purchase order from Solaris for 13 fuel cell modules to power 13 of its Urbino 12 hydrogen model buses, to be deployed with In-der-City-Bus GmbH in Frankfurt, Germany;
    • Received follow-on purchase order from New Flyer for 20 fuel cell modules to power 20 of its Xcelsior model buses, to be deployed with Alameda-Contra Costa Transit District in Oakland, Calif.;
    • Received an order from Tata Motors for 15 fuel cell modules to power 15 of its fuel cell electric buses to be deployed with the research and development centre of Indian Oil Corporation Ltd. (IOCL) in Faridabad, the largest city in the national capital region of Delhi.
  • Rail:
    • Received a purchase order for two 200-kilowatt fuel cell modules from Siemens to power a two-car Mireo Plus H passenger train through a trial operation in Bavaria, Germany.
  • Other:
    • Subsequent to the quarter, announced receipt of a purchase order for a 200-kilowatt FCwave fuel cell module from Fusion-Fuel, to be integrated into its H2Evora project in the Evora region of Portugal; the H2Evora project will use Fusion-Fuel's new HEVO electrolyzer design to produce green hydrogen that will power the FCwave module for generation of zero-emission electricity;
    • Announced a follow-on multiyear supply agreement with W.L. Gore & Associates for Gore-Select membrane material used by Ballard in the production of market-leading and proprietary membrane electrode assemblies (MEAs) for the company's fuel cells.

                                           FINANCIAL SUMMARY
                                      (millions of U.S. dollars)

                                                 Three months ended June 30,   Six months ended June 30,
                                                         2021          2020          2021          2020
Revenue
Fuel cell product services (1, 2)
Heavy-duty motive                                       $11.0         $12.5         $17.9         $22.8
Material handling                                        $2.0          $2.2          $3.7          $2.9
Backup power                                             $2.8          $1.3          $3.6          $2.5
Subtotal                                                $15.8         $16.0         $25.2         $28.3
                                                     --------      --------      --------      --------
Technology solutions                                     $9.1          $9.8         $17.4         $21.4
                                                     --------      --------      --------      --------
Total fuel cell product and service revenue             $25.0         $25.8         $42.6         $49.7
                                                     --------      --------      --------      --------
Profitability gross margin $                             $3.8          $5.5          $6.4         $10.5
                                                     --------      --------      --------      --------
Gross margin %                                             15%           21%           15%           21%
                                                     --------      --------      --------      --------
Operating expenses                                      $24.4         $13.5         $42.4         $28.6
                                                     --------      --------      --------      --------
Cash operating costs (3)                                $20.1         $11.2         $34.4         $22.9
                                                     --------      --------      --------      --------
Equity gain (loss) in JV and associates                 ($4.2)        ($2.9)        ($7.2)        ($5.4)
                                                     --------      --------      --------      --------
Adjusted EBITDA (3)                                    ($19.7)        ($8.0)       ($33.6)       ($16.8)
                                                     --------      --------      --------      --------
Net income (loss)                                      ($21.9)       ($10.7)       ($39.7)       ($23.8)
                                                     --------      --------      --------      --------
Earnings per share                                     ($0.07)       ($0.04)       ($0.14)       ($0.10)
                                                     --------      --------      --------      --------

For a more detailed discussion of Ballard Power Systems' second quarter 2021 results, please see the company's financial statements and management's discussion and analysis, which are available at the Ballard website, SEDAR and EDGAR.

Conference call

Ballard will hold a conference call on Aug. 6, 2021, at 8 a.m. Pacific Time (11 a.m. Eastern Time), to review second 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 home page. 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.

Endnotes

(1) The company reports its results in the single operating segment of fuel cell products and services. Its fuel cell product and service segment consists of the sale and service of PEM fuel cell products for its power product markets of heavy-duty motive (consisting of bus, truck, rail and marine applications), material handling and backup power, as well as the delivery of technology solutions, including engineering services, technology transfer, and the licence and sale of its extensive intellectual property portfolio and fundamental knowledge for a variety of fuel cell applications.

(2) The unmanned aerial vehicle market has been classified as a discontinued operation in the company's third quarter of 2020 consolidated condensed financial statements. As such, the assets of the UAV market have been classified as assets held for sale as of Sept. 30, 2020. Furthermore, the historic operating results of the UAV market for both 2020 and 2019 have been removed from continuing operating results and are instead presented separately in the statement of comprehensive income as income from discontinued operations.

(3) Note that cash operating costs, EBITDA and adjusted EBITDA are non-generally accepted accounting principle measures. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable with similar measures presented by other companies. Ballard believes that cash operating costs, EBITDA and adjusted EBITDA assist investors in assessing Ballard's operating performance. These measures should be used in addition to, and not as a substitute for, net income (loss), cash flows and other measures of financial performance, and liquidity reported in accordance with GAAP. For a reconciliation of cash operating costs, EBITDA and adjusted EBITDA to the consolidated financial statements, please refer to Ballard's management's discussion and analysis.

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