2nd Jun 2016 09:06
LONDON (Alliance News) - Industrial fuel cell power company AFC Energy PLC on Thursday said it swung to loss in its first half, as work neared completion at the POWER-UP site at Stade in northern Germany, but said there was increasing demand for technology "that efficiently creates clean and sustainable energy".
AFC Energy posted a pretax loss of GBP4.0 million for the six months ended April 30, compared to a GBP1.5 million profit reported a year earlier.
AFC Energy does not generate any normal revenue, but does receive grants from the European Union for its involvement in three projects that are related to the company's alkaline fuel cell system and other technologies such as a fuel processing system and a novel ammonia fuel system. These include the POWER-UP Project, and in the first half, AFC Energy received a GBP763,204 EU grant, up from GBP736,145 the same period a year earlier.
The swing to loss, therefore, resulted from increased cost of sales to GBP2.1 million from GBP1.2 million, which the company said came as it neared completion at its POWER-UP programme in Germany.
POWER-UP is AFC Energy's project to build a stationary alkaline fuel cell power plant in Stade, and during the period, fuel cell cartridges were manufactured for the operations at the site.
The company completed its Milestone 11 in January, of achieving a gross electrical output of 204 kilowatts from the KORE fuel cell system which it said means it can now assess the optimal combination of technical, operational and commercial targets required to advance towards commercial deployment of its fuel cell system in 2016.
AFC Energy was also hit by a GBP150,000 financial loss in the first half, compared with a GBP4.5 million gain the same period a year earlier, related to an equity swap with Lanstead Capital LP which ended in April.
The company entered into equity swap and interest rate swap agreements in October 2014, and received the consideration for the agreements on a monthly basis. The amount received by AFC each month was dependent on AFC's share price performance.
AFC Energy said it was making "real solid progress" towards achieving its full year targets, namely optimising the design of its fuel cell stack, completing product development at its power plants and securing value added strategic partnerships.
"During the period we advanced our alkaline fuel cell technology to demonstrate power output of 204kW, at the Stade industrial facility in Germany. Following this success, we committed to a demanding work program and further milestones in 2016, against which the team is making sound progress in relation to technical/operational targets. In parallel, we are progressing the development of further strategic and technical partnerships for new power projects in our target markets," said Chief Executive Adam Bond.
Shares in AFC Energy were up 1.2% at 14.55 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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