Ballard Power Systems, provider of clean energy products, has released consolidated financial results for the third quarter ended 30th September, 2018.
Randy MacEwen, President and CEO said, “Ballard delivered Q3 revenue of $21.6m, gross margin of 30% and adjusted EBITDA of ($3.6m). Financial results disappointed in Q3, primarily due to a slower-than-expected ramp-up in China, while the company’s long-term value and growth potential improved in the quarter.”
MacEwen explained that near-term headwinds in China resulted in a material reduction in MEA sales to the Guangdong Synergy-Ballard joint venture in Q3 and in the outlook. He reported that slower growth in market demand has been primarily the result of the relatively modest pace of hydrogen (H2) fuelling station roll-out, along with evolving government subsidy rules and delays in fuel cell electric vehicle (FCEV) certifications.
During the quarter, however, Ballard entered into a strategic collaboration with Weichai Power, divested its Power Manager business, and unveiled its next-generation fuel cell stack.
“We continue to position Ballard as the leading fuel cell technology provider in the FCEV market for Heavy Duty Motive applications – a market poised for attractive long-term growth in key global geographies,” continued MacEwen.
The strategic collaboration with Weichai Power, which is anticipated closing by year-end, is expected to strengthen Ballard’s balance sheet through equity investments of approximately $183m, including a further investment of approximately $20m from Zhongshan Broad-Ocean Motor.
Over the next 3 years, the company also expects to deliver against its $90m Technology Solutions programme related to a next-generation technology transfer to the planned Weichai-Ballard joint venture.
Given the uncertainties regarding Synergy-Ballard joint venture’s ability to meet its ‘take or pay’ commitment under its contract with Ballard, the company is removing the remaining value of this contract from the order backlog and 12-month order book. With this adjustment, the order backlog and 12-month order book at the end of Q3 were $122.7m and $59.6m, respectively. Ballard is working with the joint venture and other partners to address current issues and future opportunities.
This adjustment, combined with the recent sale of the Power Manager business – which closed in October 2018 – and the associated absence of Power Manager revenue in Q4 2018, results in expected full-year 2018 revenue of approximately $90-95m.