VANCOUVER, BC – Ballard Power Systems (NASDAQ: BLDP) (TSX: BLDP) today announced consolidated financial results for the second quarter ended June 30, 2022. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS).
Ballard Power Systems Second Quarter 2022 (CNW Group/Ballard Power Systems Inc.)
“We continue to see policy momentum across the globe to support our vision of decreasing our planet’s emissions. We believe our product offering will make a meaningful impact on the energy transition by enabling our customers with zero emission solutions. This vision is at the forefront of our continued innovation and investment in our business and product offering”, said Mr. Randy MacEwen, President and CEO.
Mr. MacEwen remarked, “In the second quarter, our revenue was $20.9 million, and we secured new orders totaling $12.3 million, driven primarily by stationary power generation and repeat bus customers. We saw continued gross margin compression in the quarter and anticipate continued pressure throughout 2022, but we are confident in our plan to expand margins in the mid- to long-term as we transition to commercial scale production. We ended the quarter with a strong cash balance of $1 billion, which continues to support our technology development programs and other strategic growth initiatives.”
“We are encouraged by our continued progress with platform customers as they advance commercialization of zero-emissions fuel cell solutions in a variety of attractive applications and markets. The European bus market is an example of the growing scale of fuel-cell solutions, with public transport operators in Cologne, Germany and West Midlands, UK announcing plans to deploy additional hydrogen fuel cell bus fleets of 100 and over 120, respectively.”
“Given the challenging macro-economic outlook, we have decreased our planned investments in 2022. As a result, we are revising our total operating expense and capital expenditure guidance downwards from $140 to $160 million to $130 to $150 million, and $40 to $60 million to $30 to $50 million, respectively,” Mr. MacEwen stated. “Notwithstanding the current macro-economic context, we remain confident on the long-term opportunities for hydrogen and fuel cells. We see converging trends driving the energy transition, including net-zero ambitions, low-cost renewable energy, and energy security. At Ballard, we are well positioned with leading fuel cell technology, strong customer and partner relationships, and a solid balance sheet.”
Q2 2022 Financial Highlights
(all comparisons are to Q2 2021 unless otherwise noted)
- Total revenue was $20.9 million in the quarter, down 16% year-over-year.
- Power Products revenue of $13.5 million decreased 14%, driven by lower shipments of fuel cell products.
- Heavy-Duty revenues of $10.7 million decreased by a nominal amount.
- Stationary Power Generation revenues of $2.0 million decreased 28% as a result of lower sales of stationary power generation fuel cell modules, stacks, products and service revenues.
- Material Handling revenues of $0.8 million decreased 58%, primarily as a result of lower shipments to Plug Power.
- Technology Solutions revenue of $7.4 million decreased 20% due primarily to decreased amounts earned on the Weichai Ballard JV and Audi programs.
- Gross margin was (11)% in the quarter, a decrease of 26-points, driven by a combination of a shift to lower overall product margin and service revenue mix including the impacts of pricing strategy, higher fixed overhead costs, higher warranty provisions and adjustments, increase in supply costs, and inventory adjustments.
- Total Operating Expenses and Cash Operating Costs3 were $38.5 million and $32.1 million in the quarter, respectively, an increase of 58% and 59%, respectively. Increases were driven primarily by higher expenditure on research, technology and product development activities. Costs were also higher as a result of increased general and administrative expenses.
- Adjusted EBITDA3 was ($35.0) million, compared to ($19.7) million in Q2 2021, primarily a result of the decrease in gross margin and increase in Cash Operating Costs.
- Ballard received approximately $12.3 million of new orders in Q2, and delivered orders valued at $20.9 million, resulting in an Order Backlog of approximately $91.2 million at end-Q2.
- The 12-month Order Book was $61.4 million at end-Q2, a decrease of $4.3 million from the end of Q1 2022.
| Order Backlog ($M) | Order Backlog at End-Q1 2022 |
Orders Received in Q2 2022 |
Orders Delivered in Q2 2022 |
Order Backlog at End-Q2 2022 |
| Total Fuel Cell Products & Services |
$99.8 | $12.3 | $20.9 | $91.2 |
2022 Outlook
Ballard is revising its 2022 Total Operating Expense4 and Capital Expenditure5 guidance downwards as follows:
| 2022 | Previous Guidance | Revised Guidance |
| Total Operating Expense4 | $140 – $160 million | $130 – $150 million |
| Capital Expenditure5 | $40 – $60 million | $30 – $50 million |
Q2 2022 Financial Summary
| (Millions of U.S. dollars, except per share amounts) |
 Three months ended June 30, | ||
| 2022 | 2021 | % Change | |
| REVENUE | |||
| Fuel Cell Products & Services:1,2 | |||
| Â Heavy Duty Motive | $10.7 | $11.0 | (3)Â % |
| Â Material Handling | $0.8 | $2.0 | (58)Â % |
| Â Stationary Power Generation | $2.0 | $2.8 | (28)Â % |
| Â Sub-Total | $13.5 | $15.8 | (14)Â % |
| Â Technology Solutions | $7.4 | $9.1 | (20)Â % |
| Total Fuel Cell Products & Services Revenue | $20.9 | $25.0 | (16)Â % |
| PROFITABILITY
Gross Margin $ |
|||
| ($2.2) | $3.8 | (158)Â % | |
| Gross Margin % | (11)Â % | 15Â % | (26) pts |
| Total Operating Expenses | $38.5 | $24.4 | 58Â % |
| Cash Operating Costs3 | $32.1 | $20.1 | 59Â % |
| Equity (loss) in JV & Associates | ($1.6) | ($4.2) | 62Â % |
| Adjusted EBITDA3 | ($35.0) | ($19.7) | (78)Â % |
| Net (Loss) from continuing operations | ($55.8) | ($21.9) | (155)Â % |
| Earnings Per Share | ($0.19) | ($0.07) | (171)Â % |
| CASH | |||
| Cash provided by (used in) Operating Activities: | |||
| Cash Operating (Loss) | ($34.3) | ($14.2) | (142)Â % |
| Working Capital Changes | ($4.7) | ($5.4) | 14Â % |
| Cash provided by (used in) Operating Activities | ($39.0) | ($19.6) | (99)Â % |
| Cash Reserves | $1,004.6 | $1,246.8 | (19)Â % |
Conference Call
Ballard will hold a conference call on Wednesday, August 10, 2022 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review second quarter 2022 operating results. The live call can be accessed by dialing +1.604.638.5340. Alternatively, a live audio and webcast can be accessed through a link on Ballard’s homepage (www.ballard.com). Following the call, the audio webcast and presentation materials will be archived in the ‘Earnings, Interviews & Presentations’ area of the ‘Investors’ section of Ballard’s website (www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems’ (NASDAQ: BLDP; TSX: BLDP) 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, and stationary power. To learn more about Ballard, please visit www.ballard.com.
SOURCE Ballard Power Systems Inc.
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