LONDON (Dow Jones)--Ceramic Fuel Cells (CFCL), a global leader in fuel cell development, said Thursday that it has recently produced its first fully integrated New Generation Boiler unit in preparation for European product deployment in 2009, having successfully operated semi-integrated units for some time.
The unit has been completed on time and is currently operating at CFCL's facilities in Melbourne. From the first quarter of 2009 CFCL will ship Gennex fuel cell modules to its European appliance partners for integration into new generation boiler units - which produce highly efficient power as well as heat for homes.
CFCL has identified a potential revenue opportunity of EUR1bn p.a. from sales of micro CHP units in its initial target markets of the U.K., Germany, Holland, France and Japan. This is achievable on market penetration assumptions of only 5%.
CFCL has received one forward volume order from Nuon, for 50,000 units based on agreed targets, and is in discussions to obtain further orders from other customers.
CFCL's technology is rapidly approaching and in many cases exceeding commercial targets.
CFCL continues to set industry benchmarks for electrical efficiency, moving from the 50% efficiency announced in September to now achieving 55% electrical efficiency whilst exporting 1.5 kW to the local power grid. This exceeds CFCL's commercial targets and is far higher than the electrical efficiency of the current grid as well as other microgeneration technologies.
Fuel cell stack life has improved more than 80% in the last 12 months. CFCL is now achieving a degradation rate of less than 0.2% per 1,000 hours, on a stack that has been producing 1kW of power for 7,000 hours in a test station. The company is on track to repeat these results in a complete system during 2009 to achieve a key commercial target of a projected stack life of 4-5 years (40,000 hours).
The company and its financial advisors are continuing to pursue several options to raise additional cash, including equity funding. The company has also been looking to liquidate some of its financial investments, subject to market conditions and pricing.
The company has recently sold one of its investments for A$2.4 million / GBP1.1 million cash. This investment was sold at a discount of 50%, representing an impairment of $2.4 million to its face value.
In October the company announced that it was likely to take an impairment charge of up to $13 million for one of its investments. The company is exploring several options to realise value from this investment which would reduce the amount of this impairment charge.
The company is currently in discussions with several existing institutional investors about a potential equity fundraising. The company expects to make an announcement about the outcome of these discussions, and give a further update on its finances, shortly.
The company is looking at taking legal action to recover losses suffered in relation to its investments and has received an offer to fund the costs of this litigation.
In order to reduce future cash outflow the company is deferring some of the planned expenditure on the volume manufacturing plant in Germany. Working with its contractors and suppliers, CFCL has revised the project plan to reduce spending from January to May 2009 by $4.9 million / GBP2.2 million and the plant is now scheduled for completion in October 2009.
The total project cost is expected to be less than the EUR12.4 million budget announced in February.
The impact on CFCL's commercialisation schedule is minimal, with the company having sufficient manufacturing capacity in Melbourne to continue to supply fuel cell modules to its partners throughout 2009.
Maybe halt has to do with another supplier order, subject to the meeting of hurdles? (speculation) However I do concede that the sell down in the UK makes it look more like a cap raising?
Hold on no halt in the UK? How does that work?
CFU Price at posting:
11.9¢ Sentiment: LT Buy Disclosure: Held
