Ceramic Fuel Cells Limited Half Year Accounts

RNS Number : 1367Y
Ceramic Fuel Cells Limited
27 February 2012
Monday 27 February 2012
Half Year Accounts
Key Points:
-- Three-fold increase in revenue
-- Five-fold increase in unit sales
-- Significant increase in international sales and service channels
Ceramic Fuel Cells Limited [AIM / ASX: CFU] - a leading developer of high efficiency and low emission power products for homes and other buildings - today released its interim financial results for the six months ended 31 December 2011.
Revenue for the period increased three-fold to AUD 3.3 million, from AUD 900,000 in the previous corresponding period. During the period the Company recorded sales of 67 units, a five-fold increase in sales compared to the December 2010 half year.
Cumulative orders doubled from July to December 2011 - to a total of 614 units. Orders for 100 units or more were received from distributors in Germany and The Netherlands, and from E.ON UK. The current open order book of 476 units will deliver increased revenue and cashflow in future quarters.
During the half year the Company added significantly to international sales and service channels. BlueGen distributors were appointed in key markets of Germany and The Netherlands. Local installation and service partners were trained in Europe, United Kingdom and Australia.
Ceramic Fuel Cells continues to invest in product development, and will continue to scale up for future growth. A placement and a rights issue during the half year raised AUD 16.4 million.
Ceramic Fuel Cells Managing Director Brendan Dow said recent developments in European markets had added significantly to the attractiveness of the company's products. "The German Parliament has proposed an increased feed in tariff for products like ours, and German states have announced market introduction programs. Earlier this month we stated that we welcomed the UK Government's announcement of an increase in the feed in tariff for micro power and heating products (m-CHP), which includes our BlueGen product. There is no doubt that governments the world over are seeing the benefits of distributed generation of electricity, particularly technologies like ours which significantly reduce carbon emissions."
BlueGen delivers an electrical efficiency of up to 60 percent - the highest in the world. When the heat from BlueGen is used to produce hot water, total efficiency increases to up to 85 percent. The BlueGen product is the first and currently the only fuel cell m-CHP product to receive certification under the Microgeneration Certification Scheme (MCS) and be eligible for the UK feed in tariff.
In November 2011 the Company signed a Manufacturing Services Memorandum of Understanding with Jabil Circuit Inc, a global electronic manufacturing service provider with 55 factories in 22 countries and annual revenue of USD 16 billion. Jabil's global cleantech business unit makes a range of energy products including solar panels, smart grid meters and wind turbines. Under the MoU, Ceramic Fuel Cells and Jabil will work together towards scaling up manufacturing volumes of Ceramic Fuel Cells' Gennex fuel cell module and BlueGen product and reducing unit costs quickly, whilst maintaining consistent quality and security of supply.
The Directors' Report and Financial Report for the half year are available at www.cfcl.com.au.

Ceramic Fuel Cells Limited Interim Results Half Year to 31 December 2011

FY11 Half Year to 31 December 2010

Revenue: A$ 927k / £ 580k

• Switch from FY10 lumpy m-CHP ‘project’income to FY11 BlueGen product sales
• Revenue from mCHP product expected to increase in coming periods
• Backlog of contracted but unrecognised orders of A$ 8.8m / £5.5m (includes EWE order)

Net operating cash outflow: A$7.3m / £ 4.6m

• Higher in December quarter as inventory built up Other significant cash flow items

• Capex A$ 0.9m / £0.5m
• Financing, including fundraising –net cash inflow of A$ 28.9m / £18.1m

Net loss: A$(8.4)m / £(5.2)m

• Operational EBIT A$(10.1)m / £(6.3)m
• FX translation loss –A$(2.4)m / £(1.5)m –from appreciation of AUD
• Other income –legal settlement A$ 3.9m / £2.4m

BlueGen sales were the dominant source of revenue in this half year
• Product sales revenue replacing lumpy ‘project’ based revenue ƒ
Sales process is getting simpler, shorter and faster
• Additional local EU sales resources ƒ
• Appointing local installation and service agents ƒ
Utilities are taking the opportunity seriously
• 15 energy utilities are currently testing and demonstrating BlueGen ƒ
• Order backlog currently 241 units

Developing products with leading partners:
Germany EWE ƒ
France GdFSUEZ ƒ
UK EON UK ƒ
December 2010, order from EWE for up to 200 units
• Total revenue of up to EUR 4.9m / AUD 6.6m over 2 years ƒ
• Largest product order the Company has received, significant ƒ
follow-on order from EWE
• Conditional on part-funding from German Government

BlueGen received full CE approval, April 2011
• “Type” approval – applies to all BlueGen products(not a limited “field trial” approval)

BlueGen received full CE approval, April 2010

• “Type”approval –applies to all BlueGen products (not a limited “field trial”approval)
BlueGen approved for German Feed in Tariff, 2010
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• Approved by German Government authority (BAFA)

MCS certification for UK Feed in Tariff


• New standard written
• Successful test to PAS67 demonstrates BlueGen provides hot water for homes
reduces carbon emissions
• Melbourne site visit December 2010
• Finalising documentation & procedures (early Q2)

Australia:
• Inverter approved by Clean Energy Council (complies with AS4777)
• Currently ‘type B’gas appliance, working on type A approval (as an ordinary gas appliance)

Operating Results
During the half-year the Company’s ‘Revenue from continuing operations’ decreased from AUD 1.5m to AUD 0.9m, however in contrast to previous periods, revenues during this period were primarily from actual product sales. Up until recently, most revenue has been earned from the Company’s utility partners in Germany, France and the United Kingdom for designing, developing and installing integrated mCHP products. This revenue has tended to be large and “one off” in nature, whereas the Company now foresees smoother revenue streams as sales of its BlueGen product increase substantially during 2011. Accordingly in the current half-year the majority of revenue has been earned from BlueGen sales.

The Company expects revenue from the integrated product to increase in the coming
year, particularly as a result of the order for up to 200 units placed by EWE in December 2010.

In accordance with accounting standards, the Company recognises revenue on BlueGen
sales when the unit is installed at the Customer’s site, and then progressively over the contracted support period. From when the Company signs the order with the Customer until the unit is delivered and installed, the Company has a ‘backlog’ of contracted orders worth AUD 8.8m (including the EWE deal). This amount will be progressively recognised as revenue in the Company’s accounts as the Company delivers these units. The EWE units will be delivered over 24 months.
Other income earned during the period rose from AUD 0.3m to AUD 4.1m. This is due to the settlement of legal action that had been taken against the Company’s former
investment and treasury advisor.

Expenditure on Research and Product Development during the period was AUD 5.8m
which was up by 4.8% on the prior period. The primary activity has been the development of commercial product for market. Expenditure on Sales & Marketing of AUD 0.7m was in line with the prior period.

Expenses relating to the General and Administrative functional area of AUD 4.5m were in line with the prior period however the current period figure included an increase in depreciation of AUD 0.5m relating to the plant in Germany. Excluding depreciation these expenses were down by 11% compared to the prior period.
The current period includes a net foreign exchange loss of AUD 2.4m compared to a
similar loss in the prior period of AUD 2.3m. These losses arise predominantly from the translation of foreign currency cash and investments to Australian dollars. The Group’s policy is to not hedge this foreign currency translation risk (other than the ‘natural’ hedge of holding cash in the same currency as expected expenditure). The translation loss in the current period has arisen from the appreciation of the Australian dollar against the pound sterling (16.2%) and the euro (9.6%).

During the prior half-year the Company disposed of the remaining financial securities that it had held. These securities had been previously treated as impaired and then sold for an amount greater than the book value, which gave rise to a gain last year of AUD 2.9m. No similar transaction has taken place in the current half-year.

Half Yearly Report 18/02/11 RNS Ceramic Fuel Cells Limited

RNS Number : 4688B

Ceramic Fuel Cells Limited

18 February 2011

18 February 2011

Ceramic Fuel Cells Limited

Half Year Accounts

Ceramic Fuel Cells Limited (AIM / ASX: CFU) a leading developer of high efficiency and low emission power products for homes, today released its interim financial results for the six months ended 31 December 2010.

The Directors' Report and Financial Report for the half year are available at www.cfcl.com.au.

A company presentation, and a link to a webcast interview with Managing Director Brendan Dow, are also available at www.cfcl.com.au.

For further information please contact:


Ceramic Fuel Cells
Andrew Neilson Tel: +613 9554 2300
Email: investor@cfcl.com.au

Nomura Code Securities (AIM Tel: +44 (0) 207 776
Nomad) 1200
Juliet Thompson, Chris Golden

Australia Media enquiries
Richard Allen, Oxygen Financial Tel: +613 9915 6341
Public Relations

UK Media enquiries Tel: +44 (0) 7786 116
Mark Way 991
Email: Mark.W@harvardamerica.com


About Ceramic Fuel Cells Limited:

Ceramic Fuel Cells Limited is a world leader in developing fuel cell technology to provide highly efficient and low-emission electricity from widely available natural gas. Ceramic Fuel Cells is developing fully integrated power and heating products with leading energy companies E.ON UK in the United Kingdom, GdF Suez in France and EWE in Germany. Ceramic Fuel Cells has also sold more than 60 BlueGen gas-to-electricity generators to major utilities and other foundation customers in Europe, Japan, Australia and the USA. Ceramic Fuel Cells is listed on the London Stock Exchange AIM market and the Australian Securities Exchange (code CFU). www.cfcl.com.au

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