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AFC Issues Positive Interim Results

By June 30, 2022 6   min read  (1139 words)

June 30, 2022 |

Fuel Cells Works, AFC Issues Positive Interim Results

AFC Energy (AIM: AFC), a leading provider of hydrogen power generation technologies, is pleased to announce its interim results for the half year ended 30 April 2022.

Commercial Highlights

  • First commercial order of S Series liquid cooled fuel cell system received from ABB worth up to £4m
  • High power density system
  • Initially to be configured for EV charging use in grid constrained environments
  • System design contemplates other applications especially maritime and data centres
  • £2m non-refundable deposit received from ABB (revenue recognition upon milestone achievement)
  • Next milestone payment of £1 million due upon delivery of initial 100kW unit scheduled for this year
  • Considerable progress has been made since the launch of the Company’s new power dense S Series fuel cell systems and Power Tower products in Q1 2022
  • Partners and customers have opted to amend earlier agreements in order to upgrade to the Company’s latest Hydrogen power generation platforms.
  • Order book of further qualified fuel cell deployment enquiries continues to strengthen, leading to system leasing contracts

Secured series of initial leasing contracts with construction sector:

  • Acciona Power Tower field trial to be conducted across several months in Spain during H2
  • Power Tower system leased to Keltbray for UK construction site deployment in coming weeks
  • Power Tower system leased to Kier for South West construction site deployment in August 2022 (signed post period-end)
  • Extreme E contracted to continue to use AFC Energy’s L Series fuel cell for all five rounds of Season 2 following a successful inaugural season
  • Successful deployment of L Series fuel cell system to Urban-Air Port’s Air One deployment in Coventry designed to support electric vertical take-off and landing (eVTOL) aircraft and serve as a hub for other sustainable modes of transport like electric vehicles (EVs)
  • Successfully achieved Approval in Principle (“AiP”) in December 2021 from international certification agency DNV for Ammonia based fuel cell and cracker system for cargo ships in conjunction with ship builder, VARD
  • AiP receipt has led to multiple new enquiries from ship builders interested in exploring auxiliary and propulsion systems .

Financial Highlights

  • Revenue of £0.28 million (HY 2021: £0.15 million) includes revenue earned for Extreme E second season series contract renewal.
  • Initial payment of £2 million collected from ABB.
  • Half year cash balance of £48.6m (HY 2021: £61.3m) with a loss for the period of £8.5m (HY 2021: £3.6m).
  • Company continues to target full year growth in revenue.

Operational Highlights

  • Production, technical and operating capacity significantly enhanced during the period with employee numbers up to 87 at period end (2021: 34) further improving depth of skills and experience
  • Significant facility upgrades completed with new offices, manufacturing and testing facilities
  • Graeme Lewis, Chief Financial Officer, has today informed the Company that he wishes to retire. In order to ensure an orderly handover to his successor, Graeme has agreed to stay with the Company until 30 April 2023. The Company has commenced the process of recruiting a successor and will update the market in due course.

Technology Highlights

  • Launched the new S Series Power Tower utilising AFC Energy’s Hybrid Fuel Cell (“HFC”) platform
  • offers materially higher energy density than earlier generation products
  • aimed at the ability to use Methanol and Ammonia alongside Hydrogen to offer fuel cell customers a “flex fuel” solution
  • Development of the 2.5kW air cooled, high energy dense, fuel cell technology platform which is the core component of the Power Tower system
  • Working with methanol reformer and ammonia cracker technologies to optimise whole of system operation to drive reductions in Total Cost of Ownership (“TCO”)
  • Completed Front End Engineering and Design (“FEED”) study for Fuel Tower concept utilising methanol reformer technology platforms to support Power Tower deployments
  • A number of further technology developments are expected in the second half of the year, including:
  • Integration of methanol reformer into Power Tower unit validating new fuel flex platform.
  • Taking receipt of scaled up ammonia cracker technology for integration with fuel cell systems.
  • Creation of new technology platforms upstream of the fuel cell for wider value chain exposure.
  • Multiple Power Tower configuration to increase power output and higher voltage efficiencies

Outlook

  • Series of Power Tower deployments at construction sites in the UK and Spain in H2 will deliver valuable field data ahead of wider customer deployment
  • Initial leased system deployments to construction market expected to lead to further deployments and commercial orders
  • ACCIONA Power Tower system undergoing final commissioning before deployment to Spain over the next fortnight
  • Expected delivery in latter part of the year of ABB’s first milestone of 100kW high energy dense S Series Liquid Cooled fuel cell system run on Hydrogen
  • System cost reductions combined with high cost of diesel and the removal of UK diesel subsidies are driving increased levels of customer enquiries
  • Revenues from the leasing of Power Tower systems to be supplemented by the associated supply of Hydrogen on commercial terms
  • Continued cost reduction of system and components through engineering and volume pricing
  • Ongoing dialogue with maritime sector raising profile of AFC Energy’s technology for shipping and portside applications

Adam Bond, Chief Executive of AFC Energy, said:

“I am pleased that following the launch earlier this year of our Power Tower fuel cell platform, AFC Energy will see several of these new systems being operated by strategic partners in off-grid environments in the coming months. We are carefully selecting strategic partners that have a pressing need and desire to lead in the decarbonisation of their industries in line with Net Zero aspirations.

“We continue to assess our manufacturing scale up and supply chain and are preparing for growth in system production and deployment. The Power Tower, whilst currently focussing on Hydrogen fuel, will also be able to meet the demands of clients for Hydrogen carrier fuel compatibility later this year with the integration of methanol reformer technology. We believe, based on market feedback, that this will lead to an increase in the number of systems deployed and also the size of those systems.

“Our robust cash position enables us to continue to invest in our people, products and technology platforms to maximise our potential within the global clean energy space. The macro environment of high global energy prices and drive for enhanced energy security and independence continues to create a compelling environment for accelerated growth of the global Hydrogen market and we remain focused on delivering tangible deployment expectations for the full year.”

About AFC Energy plc

AFC Energy plc is a leading provider of hydrogen fuel cell power systems to generate clean energy in support of the global energy transition.  Based in the UK, the Company’s scalable systems provide off-grid, zero emission power that are already being deployed for rapid electric vehicle charging and the replacement of diesel generators for temporary power applications.  AFC Energy is also working with global partners in the deployment of products for the Maritime, Ports, Data Centres and Rail industries, emphasising the central role of its technology in the decarbonisation of global industry.

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