Ceres Power Reports Positive First Half Commercial and Financial Progress

Ceres Power Holdings plc (“Ceres Power”, “Ceres”, the “Company” or the “Group”) (AIM: CWR.L), a global leader in fuel cell and electrochemical technology, announces its half-yearly results for the six months ended 30 June 2021.

 Financial highlights

• Revenue and other income up 96% to £17.4m (H1 2020: £8.9m), reflecting strong progress of commercial partnerships
• Increased gross profit of £12.2m (H1 2020: £7.1m) at sector-leading gross margin of 72% (H1 2020: 79%)
• Successfully raised net proceeds of £179m in March through an equity fundraising of 17.1 million new ordinary shares to support growth into electrolysis for green hydrogen and further SOFC applications.
• Weichai (20%) and Bosch (18%) fully supportive of the fundraising and strategy
• Group had £263m of cash and investments at 30 June 2021
• Order book* of £42.0m and pipeline* of £43.8m as at 30 June 2021

 Commercial highlights

• New joint development programme for a 30kW stationary power system with Weichai, increasing the commercial scope of the agreement alongside transportation
• Discussions progressing well with Weichai on the JV and wider strategic relationship. No further update at this time
• First-of-a-kind solid oxide electrolyser (SOEC) 1MW-scale demonstrator to become operational in 2022.  Strong commercial interest and discussions now in progress with several commercial partners
• Bosch to invest €400m into its solid oxide fuel cell (SOFC) business between now and 2024.  It plans to put up to 100 small-scale stationary fuel cell power plants into operation this year
• AVL List strategic collaboration progressing well, with three early-stage projects and a strong pipeline
• Doosan signed a memorandum of understanding with the shipbuilding division of Hyundai Heavy Industries, to develop a marine system based on Ceres’ proprietary SOFC stack technology

 Current Trading and Outlook

• On track to achieve revenue in line with consensus estimates of £31.5 million for the 12 months ending 30 December 2021, subject to no significant constraints on our operations
• Doosan announced that it has completed development of its 10kW SOFC system using Ceres’ technology. Soft commercial launch is planned for 2022
• Successful in two separate projects awarded UK grant funding as part of the Clean Maritime Demonstration Competition to explore the use of our technology in marine applications
• Caroline Hargrove joining the Executive team as Chief Technology Officer and Mark Selby appointed to a new role as Chief Innovation Officer, both with effect from 25^th October 2021
• Plan to move up to the London Stock Exchange Main Market Premium Listing is on track for mid-2022

Phil Caldwell, chief executive of Ceres commented: “We are pleased to report a strong performance for the Company in the first half of 2021, including a notable increase in our revenues at sector-leading gross margins. The outlook for clean technology innovation and hydrogen remains strong, buoyed by growth in strategies, regulation and green investment. Our partners continue to announce significant developments in the scale and application of our technology and the high level of interest and early engagement around its use for electrolysis to produce green hydrogen is very promising.” 

_{*Order book refers to confirmed contracted revenue and other income while pipeline is contracted revenue and other income which management estimate is contingent upon options not under the control of Ceres.}  

Financial Summary:	Six months ended 30 June 2021 Unaudited	Six months ended 30 June 2020 Unaudited	18 months ended 31 December 2020 Audited
	£’000	£’000	£’000
Total revenue and other operating income, comprising:	17,436	8,900	32,987
Licence fees	10,682	3,035	10,519
Engineering services revenue	2,669	3,104	10,866
Provision of technology hardware	3,759	2,747	10,297
Other operating income	326	14	1,305
Gross margin %	72%	79%	67%
Adjusted EBITDA loss1 – SOFC2	(371)	(4,332)	(9,063)
Adjusted EBITDA loss1 – SOEC2	(4,144)	(656)	(2,305)
Adjusted EBITDA loss1 – total Group	(4,515)	(4,988)	(11,368)
Operating loss	(7,602)	(7,172)	(17,634)
Net cash used in operating activities	(13,170)	(1,862)	(5,824)
Net cash and investments	262,889	107,981	110,186

 

¹     Adjusted EBITDA loss is an alternative performance measure, as defined and reconciled to operating loss in the non-GAAP section at the end of this report.

²     Following the Group’s decision to invest more heavily into solid oxide electrolysis cell (SOEC) technology, the separate disclosure of SOEC Adjusted EBITDA in addition to the Group’s historical solid oxide fuel cell (SOFC) technology Adjusted EBITDA is considered to provide additional useful information to allow readers of the interim results to more fully understand the Group’s performance. Adjusted EBITDA by segment is reconciled to operating loss in Note 3.

 

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