24th Jul 2007 07:00
Ceramic Fuel Cells Limited24 July 2007 24 July 2007 CERAMIC FUEL CELLS LIMITED TRADING UPDATE FOR QUARTER ENDED 30 JUNE 2007 Ceramic Fuel Cells Limited ("CFCL" or the "Company"), a leading developer ofsolid oxide fuel cells for micro-combined heat and power (m-CHP) units, todayannounces its trading update and cashflow statement for the fourth quarter ended30 June 2007. In a separate announcement today CFCL, Nuon NV (Nuon), Holland'sleading generator and distributor of electricity, gas and heat and DeDietrich-Remeha Group, represented by Remeha BV (Remeha), announce that theyhave formed a collaboration to jointly develop a fully integrated m-CHP unit forthe residential market across The Netherlands and Belgium. Since the beginning of CFCL's financial year, the Company has now completed allits partnering objectives in Europe. The Company has secured four agreementswith major utilities and boiler manufacturers in the largest and most advancedeconomies of Benelux, France, Germany and the UK, giving access to more than 20million customers across Europe. CFCL is now developing m-CHP products with itslaunch partners as the next key stage towards commercialisation. Highlights of the quarter: • Continued to make good progress on the product development projects in Germany and France. • Continued to upgrade manufacturing equipment in Melbourne. • Site works and equipment installation at the powder plant in Merseyside, UK. • Hired local staff to establish the project office for the manufacturing facility in Heinsberg, Germany. • Net operating cash outflow of A$4.1 million / £1.6 million (Q3: A$3.3 million / £1.3 million). • Total cash and financial assets at 30 June 2007 of A$60.3 million / £24.1 million. Since the quarter end: • Signed a product development agreement with E.ON UK for the United Kingdom residential market. • Signed a product development agreement with Nuon NV, Remeha Group BV and De Dietrich Thermique for the Benelux residential market. Brendan Dow, Managing Director of Ceramic Fuel Cells, said: "This last financial year has been a period of significant progress for CFCL,with the recent UK and Benelux partnerships completing our stated strategy ofsecuring four EU launch partners and giving us access to the largest and mostadvanced markets across Europe. Product development with our French and Germanpartners is progressing well, validating our strategy of working together withutilities and appliance partners. We will be announcing further milestones inproduct development as we move towards commercialisation. We are also beginningto scale up our manufacturing capabilities to meet the timetable." "We remain focused on successfully commercialising the m-CHP unit, and areconfident that we remain ahead of the curve in our development initiatives." Ceramic Fuel Cells will host a conference call for analysts this morning at08.30 British Summer Time. Please contact Hogarth PR on +44 (0) 20 7357 9477 fordetails. For further information please contact: Ceramic Fuel CellsAndrew Neilson Tel: +61 419 950 771Brendan Bilton Tel: +44 (0) 7798 554 191 Email: [email protected] Hogarth Partnership (PR for CFCL) Tel: +44 (0) 20 7357 9477Nick Denton / Sarah MacLeod /Sarah Richardson Libertas Capital (NOMAD for CFCL) Tel : +44 (0) 20 7569 9666Andrew HardyAamir Quraishi About CFCL Ceramic Fuel Cells Limited is a leading developer of solid oxide fuel cell(SOFC) technology which can provide reliable, energy efficient, high-quality,and low-emission electricity from widely available natural gas and renewablefuels. CFCL is developing SOFC products for small-scale on-site micro combinedheat and power (m-CHP) and distributed generation units that co-generateelectricity and heat for domestic use. CFCL is listed on the London StockExchange AIM market and the Australian Stock Exchange (code CFU). www.cfcl.com.au Financial Review Net operating cash outflow for the fourth quarter was A$4.1 million, which washigher than the previous quarter, due to higher expenditure on productdevelopment and staff costs. The Company shipped one additional productdevelopment unit during the quarter, which resulted in higher receipts fromcustomers than prior quarters. Receipts from customers for the full year wereA$270,000. Further product development units will be shipped during the secondhalf of the calendar year. The net operating cash outflow for the full year was A$15.3 million, which washigher than FY06 (A$12.2 million) and similar to FY05 (A$15.2 million). As expected, capital expenditure was higher in the quarter as the Companyupgraded its Melbourne plant and commissions its UK powder plant. Capitalexpenditure was A$2.3 million for the fourth quarter, up from A$2.2 million forthe third quarter. Capital expenditure for the full year was A$7.4 million.The Company expects capital expenditure to continue to increase in the comingfinancial year as the Company completes the UK powder plant and continues workon the fuel cell plant in Heinsberg, Germany. Total cash and financial assets at the end of the quarter was A$60.3 million. Operational Review Product development agreements for Germany and France The Company continues to make progress on the product development projects withGaz de France and De Dietrich Thermique (in France) and with EWE and Bruns (inGermany). The first stage in each project is to design and operate an 'Alpha' unit,whereby a CFCL NetGen unit, a high efficiency condensing boiler and a thermalstore (water tank) will be connected and operated via a single control unit.Work on this stage has begun in each project and is expected to be completed in2007. The Company will provide further updates on progress later in the year. Product development agreement with E.ON for the UK In early July the Company signed a product development agreement with E.ON UK,the company that runs Powergen, to develop and deploy a prototype fuel cellm-CHP unit in the UK. The project will follow similar stages to the German and French projects. CFCLwill announce its appliance partner for the project in due course. CFCL willsupply a NetGen+ unit for operation with a supplementary boiler and a speciallydesigned thermal store to produce an 'Alpha' prototype which will subsequentlybe deployed in a field trial. The current project schedule is for the NetGen+unit to be delivered by December 2007 and the Alpha unit to be developed in Q22008. The partners have agreed to discuss further co-operation in the subsequentdevelopment and deployment of 'Beta' CHP units (comprising CFCL's fuel cellmodule fully integrated with a condensing boiler) as well as commercial targetsfor fuel cell m-CHP units for the UK residential market. E.ON UK is the UK's largest integrated power and gas company - generating anddistributing electricity, and retailing electricity and gas for around 8.5million electricity and gas customer accounts. E.ON UK is part of the E.ONgroup, the world's largest investor-owned power and gas company. E.ON UK employsaround 16,000 people in the UK. Product development agreement with Nuon for Benelux In July the Company also signed a product development agreement with Nuon NV,Holland's leading generator and distributor of electricity, gas and heat, RemehaGroup BV and De Dietrich Thermique, to jointly develop a fully integrated m-CHPunit for the residential market across The Netherlands and Belgium. With operations in The Netherlands, Belgium and Germany, Nuon is one of theleading innovative energy companies in Europe, with a stated commitment toefficient and renewable power generation. Remeha Group BV is one of thelargest boiler manufacturers in Europe. The Remeha group of companies includesDe Dietrich Thermique, France's leading heating appliance company, with whomCFCL already collaborates via its partnership with Gaz de France. The productdevelopment project for Benelux will build on this existing collaboration. CFCL, Nuon, Remeha and De Dietrich will jointly develop 1kW m-CHP units to meetspecifications for homes in The Netherlands and Belgium. The first stage of theproject is to deploy an 'Alpha' unit, which is expected to occur in the firsthalf of 2008. Nuon will then test the system for efficiency, reliability andintegration. Based on the results of this stage, the partners will then proceedto the second stage - creation of a near-commercial 'Beta' unit, comprising asingle physical unit in which a CFCL fuel cell module is fully integrated with aDe Dietrich boiler. The parties have also agreed to define price and performance targets forcommercial m-CHP units and, if the project proceeds successfully, to placeagreed volume orders for commercial units. On the basis of these volume ordertargets Nuon will be CFCL's exclusive utility partner in the Benelux region. Fuel Cell Plant The Company is continuing its progress on the fuel cell manufacturing facilityplanned for the Oberbruch industrial park in Heinsberg, Germany. During thequarter the owner and manager of the site, Nuon, continued to undertake siteworks on the building leased by CFCL. These site works are scheduled to finishduring the September quarter. CFCL project works are expected to start towardsthe end of 2007. Nuon are also assisting CFCL in the process of obtainingenvironmental and planning consents, which are also scheduled to be completed inthe September quarter. During the quarter the Company hired three local project management staff basedat the Heinsberg site. The Company is continuing to finalise its project plans,including the scale up of the plant and the project timing and cost. TheCompany will update shareholders on progress in the second half of the year. Powder plant During the quarter the Company and its installation contractor continued work onthe ceramic powder plant in Bromborough, Merseyside, UK, including site worksand equipment installation. The plant is scheduled to be operational duringOctober 2007. Melbourne facility As announced in the previous quarter, the Company continued to upgrade itsmanufacturing plant at Noble Park, Melbourne, to make the new metal-ceramic fuelcells and balance of plant components. The equipment and processes upgradedduring the June quarter included a new semi-continuous furnace, laser cuttingand measurement equipment, ultrasonic washing equipment for metal stack partsand a robot cell assembly system. Cell and Stack Manufacturing During the quarter the Company continued to manufacture metal-ceramic stacks atits upgraded facilities in Melbourne. The Company continues to make technicalimprovements in degradation and durability which are the key metrics forcommercial fuel cells. GennexTM fuel cell modules, comprising metal-ceramic stacks and new balance ofplant components, will be integrated into NetGen units for delivery in 2007. Inthe meantime the Company is continuing to utilise its 'Gen4' all-ceramic stacksin its existing field trial units. ENDS Rule 4.7B Appendix 4C Quarterly report for entities admitted on the basis of commitments Introduced 31/3/2000. Amended 30/9/2001 Name of entity CERAMIC FUEL CELLS LIMITED ABN Quarter ended ("current quarter") 82 055 736 671 30 JUNE 2007 Consolidated statement of cash flows Current quarter Year to dateCash flows related to operating activities (12 months) $A'000 $A'000 1.1 Receipts from customers 123 270 1.2 Payments for (a) staff costs 1 (2,670) (9,906) (b) advertising and marketing 3 (534) (1,280) (1,661) (5,068) (c) research and product development 3 - - (d) leased assets (276) (3,934) (e) other working capital 1.3 Dividends received - - 1.4 Interest and other items of a similar nature received 707 3,677 1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other - Net GST Received/(Paid) 169 890 - Export Market Development Grant received - - - Sundry income received - 5 Net operating cash flows (4,142) (15,346) Notes 1. 'Staff costs' includes all company labour and associated headcountcosts, and therefore incorporates all Research & Product Development (R&PD)staff, Sales & Marketing (S&M) staff and General & Administrative (G&A) staff. 2. 'Advertising and marketing' excludes all S&M staff costs (as per note 1above). 3. 'Research and product development' costs includes all R&PD costs asdefined in Note 1(e) to the Financial Statements for the year ended 30 June2006, but excludes all R&PD staff costs (as per note 1 above). Current quarter Year to date (12 months) $A'000 $A'0001.8 Net operating cash flows (carried forward) (4,142) (15,346) Cash flows related to investing activities1.9 Payment for acquisition of: (a) businesses (item 5) - - (b) equity investments - - (c) intellectual property - - (d) physical non-current assets (2,312) (7,489) (e) other non-current assets - - 1.10 Proceeds from disposal of: (a) businesses (item 5) - - (b) equity investments - - (c) intellectual property - - (d) physical non-current assets - - (e) other non-current assets - - 1.11 Loans to other entities - -1.12 Loans repaid by other entities - -1.13 Other - - Net investing cash flows (2,312) (7,489) 1.14 Total operating and investing cash flows (6,454) (22,835) Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. - -1.16 Proceeds from sale of forfeited shares - -1.17 Proceeds from borrowings - -1.18 Repayment of borrowings - -1.19 Dividends paid - -1.20 Other - Financial assets: Net proceeds/(Net payments) 1 6,913 15,666 Other - Share issue costs - (31) Net financing cash flows 6,913 15,635 Net increase (decrease) in cash held 459 (7,200) 1.21 Cash at beginning of quarter/year to date 3,259 11,3671.22 Exchange rate adjustments on foreign currency cash balances (60) (509)1.23 Cash at end of quarter 3,658 3,658 Funds held in Financial Assets 56,709 56,709 Total Cash and Financial Assets 60,367 60,367 1. The net proceeds/(payments) from the disposal and purchase of the company's investments are at item 1.20. Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.24 Aggregate amount of payments to the parties included in item 1.2 91 1.25 Aggregate amount of loans to the parties included in item 1.11 - 1.26 Explanation necessary for an understanding of the transactions Directors' fees. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows NIL 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest NIL Financing facilities available Add notes as necessary for an understanding of the position. (See AASB 1026paragraph 12.2). Amount available Amount used $A'000 $A'000 3.1 Loan facilities - - 3.2 Credit standby arrangements - - Reconciliation of cash Reconciliation of cash at the end of the quarter (as Current quarter Previous quartershown in the consolidated statement of cash flows) to $A'000 $A'000the related items in the accounts is as follows. 4.1 Cash on hand and at bank 3,484 3,075 4.2 Deposits at call - - 4.3 Bank overdraft - - 4.4 Other - Security deposits 174 184 Total: cash at end of quarter (item 1.23) 3,658 3,259 Financial Assets 56,709 64,836 Total Cash and Financial Assets at end of quarter 60,367 68,095 Acquisitions and disposals of business entities Acquisitions Disposals (Item 1.9(a)) (Item 1.10(a)) 5.1 Name of entity Not applicable Not applicable 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business Compliance statement 1 This statement has been prepared under accounting policies which complywith accounting standards as defined in the Corporations Act (except to theextent that information is not required because of note 2) or other standardsacceptable to ASX. 2 This statement does give a true and fair view of the matters disclosed. Date: 19 July 2007 David CarruthersDirector Notes 1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below. • 6.2 - reconciliation of cash flows arising from operating activities to operating profit or loss • 9.2 - itemised disclosure relating to acquisitions • 9.4 - itemised disclosure relating to disposals • 12.1(a) - policy for classification of cash items • 12.3 - disclosure of restrictions on use of cash • 13.1 - comparative information 3. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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