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Ceres Power shares drop following delayed China joint ventures

25th Jul 2023 10:16

(Alliance News) - Ceres Power Holdings PLC shares were down on Tuesday, after it said it expects yearly revenue growth to be below expectations due to delayed contracts.

Shares in the clean energy technology developer were down 11% to 347.88 pence each in London on Tuesday morning.

Revenue in the six months ended June 30 is expected to be about GBP11 million, up from GBP9.7 million a year earlier. Gross margins are expected to be between 55% and 60%, compares to 55%.

Ceres said that Robert Bosch GmbH and Weichai Power Co Ltd have reconfirmed to Ceres their commitment to the China joint ventures and are targeting contracts to be signed this year.

However, given the continued delay and the time required post signature for regulatory clearances, Ceres said it is now taking a "prudent view" that the revenue associated with the JVs is now unlikely to be recognised this year.

The company said this reduces its expectation for 2023 by an estimated GBP15 million, by moving revenue associated with the China JVs to 2024.

This will be partially offset by the anticipation of additional licence fee revenue from new contract wins this year.

Ceres said the delays are not within its control.

Looking ahead, Ceres said it continues to expect full-year revenue growth against the prior year as a result of the growing pipeline of potential new licence partners which it is in active discussions.

The company added that it will update guidance as appropriate once any new material commercial contracts are signed.

Chief Executive Officer Phil Caldwell said: "Despite the ongoing delay with the China JVs, the company is making good progress elsewhere, especially with our growing pipeline of opportunities. We have made a significant shift in the business over the past two years, and I am particularly excited by the progress in our electrolyser technology, including signing a partnership with Linde and Bosch earlier this year, and the level of interest in licences to exploit the global market for green hydrogen."

By Sophie Rose, Alliance News reporter

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