Ceramic Fuel Cells Limited Cashflow Report for the June Quarter 2012

RNS Number : 3304I

Ceramic Fuel Cells Limited

24 July 2012

Tuesday 24 July 2012

Cashflow Report for the June Quarter

Ceramic Fuel Cells Limited (AIM / ASX: CFU) a leading developer of small generators that use fuel cell technology to convert natural gas into electricity and heat for homes and other buildings, today released its quarterly cashflow report for the period ended 30 June 2012.

The cashflow report is available at www.cfcl.com.au.

Key Points

-- Revenue for FY12 is expected to be approximately AUD 6.7m (GBP 4.4m), an increase of 82 percent on FY11 revenue.

-- In total CFCL has received orders for 639 products (375 BlueGen units plus 264 integrated mCHP units). This is a 108 percent increase from the order book as at 30 June 2011.

-- During the June quarter we booked to revenue sales of 76 units, bringing the total sales for FY12 to 169 units.

-- In the month of June the Company shipped 42 units, the largest number of units shipped to date in a single month.

-- Net operating cash outflow for the June quarter was AUD 7.3m (GBP 4.8m). This is higher than previous quarters due to the timing of customer payments and increased production levels and inventory. We have reduced operatingcosts and we expect cash outflow to reduce significantly in the September quarter.

-- Cash on hand at 30 June was AUD 8.8m (GBP 5.8m). We are pursuing several options to raise capital, including a Rights Issue and Overseas Offer, announced today.

Commentary

In June the Company had its highest sales month so far, delivering 42 units to customers. Payment for these sales is expected in the September quarter.

Receipts from customers for the June quarter was lower than the March quarter which included payment from E.ON UK for all of the 45 BlueGen units ordered in November 2011. The Company delivered 15 of these units to E.ON UK in the March quarter and 30 in the June quarter. Earlier in the June quarter the Company also increased purchases of components to make BlueGen units, to be held in inventory and then delivered to customers.

These factors have led to a net operating cash outflow of AUD 7.3m (GBP 4.8m) for the June quarter, compared to AUD 4.9m (GBP 3.2m) in the March quarter.

The overall net cashflow for the June quarter after investing and financing activities was an outflow of AUD 7.8m (GBP 5.1m). This included AUD 0.4m (GBP 0.2m) for capital expenditure payments in relation to work on the large scale furnace in Germany. As reported in the shareholder update of 12 July, we expect this furnace to be operational during August 2012 without any more significant capital costs.

For the full financial year to 30 June 2012, cash receipts from customers were AUD 6m (GBP 3.9m), which was a 79 percent increase on FY11.

Revenue for FY12 is expected to be approximately AUD 6.7m (GBP 4.4m), an increase of 82 percent on FY11 revenue. (This is an increase of AUD 200k on the revenue estimate of AUD 6.5m in the shareholder update released on 12 July.) During the June quarter we booked to revenue sales of 76 units, bringing the total sales for FY12 to 169 units, compared to 61 units in FY11.

While revenue has grown strongly, it needs to increase faster to fund operating costs. We have reduced operating costs, including by reducing consultants' fees and reducing casual and contract staff, in line with our manufacturing strategy to progressively outsource assembly activities. We have also sharply reduced component purchases, and deferred or cancelled existing purchase orders.

As a result of these cut backs, we expect net cash outflow to be significantly lower in the September quarter.

As at 30 June 2012 the Company held cash of AUD 8.8m (GBP 5.8m). This includes AUD 2.2m pledged as security for bank guarantees, leaving unrestricted cash of AUD 6.6m (GBP 4.4m).

As announced in the shareholder update on 12 July, we are pursuing several options to raise additional capital to enable the Company to continue to fund its operations. These measures include a Rights Issue to Australian and New Zealand holders and an Overseas Offer to UK and European shareholders announced today. (Please refer to the separate announcement for further details.)