Ballard Power Systems (TSX:BLD – News; NASDAQ:BLDP) reported for the fourth quarter and year ending December 31, 2004.
Ballard’s revenue in the fourth quarter and fiscal year ending December 31, 2004 was $20.5 million and $81.4 million respectively, compared to $29.2 million and $119.6 million for the same periods in 2003. Net loss for the quarter and fiscal year ending December 31, 2004 was $55.1 million ($0.46 per share) and $175.4 million ($1.48 per share) compared to a loss of $37.2 million ($0.31 per share) and $125.1 million ($1.07 per share) for the same periods in 2003.
The higher loss for the fourth quarter of 2004 primarily results from a $10.7 million ($0.09 per share) increase in loss on disposal and write-down of long-lived assets, a $3.4 million ($0.03 per share) year-over-year negative change in foreign exchange and a $2.9 million ($0.02 per share) decline in engineering, service and other revenue. Excluding loss on disposal and write-down of long-lived assets and foreign exchange impacts, Ballard’s net loss for the quarter would have been $38.4 million or $(0.32) per common share compared to $34.7 million or $(0.29) per common share for the same period in 2003.
“During the fourth quarter of 2004, we undertook a comprehensive review of our product portfolio and the markets in which we participate. As a result of this review, we determined that the carrying value of some of the intellectual property related to our Ecostar(TM) power converter products was not supported by management’s estimates of discounted cash flows related to these products and accordingly have written down intellectual property by $13.2 million,” said David Smith, Ballard’s Chief Financial Officer. “We also recorded provisions against inventory and capital assets related to our Nexa and Nexa RM products of $3.6 million to reflect our revised estimates of sales for these products.”
Ballard also announced significant progress in three areas crucial to the commercialization of automotive fuel cell stack technology- freeze start capability, durability and cost reduction – without compromising performance. Ballard scientists and engineers have demonstrated a stack design that can start repeatedly from -20 degrees C (-4 degrees F) and operate for more than 2,000 hours at a substantially reduced cost with no performance tradeoff. “We achieved a technology hat trick by demonstrating three of the requirements most critical to advancing fuel cells along the path to commercialization.” said Charles Stone, Ballard’s Vice President, Research and Development. “We believe we are the first fuel cell developer to successfully demonstrate these key technology milestones simultaneously in a single fuel cell stack design.”
“Most demonstrations today involve testing one requirement at a time – freeze start, power density, cost reduction – which involves tradeoffs in other requirements,” Dr. Stone continued. “While important, these types of demonstrations do not give the industry a true picture of where a company stands on the path toward commercialization. This technology demonstration, coupled with more than 925,000 kilometers of on-road experience in 2004, shows we are well on our way to meeting our goals for a commercially viable fuel cell stack by 2010.”
Ballard demonstrated its achievements on a 10-cell demonstration fuel cell stack, reducing the amount of platinum by 30%, and subjecting the stack to start-ups from -20 degrees C, all without compromising performance. Ballard engineers employed a drive cycle testing protocol that simulated real world driving, similar to tests used by auto manufacturers today. The protocol included starts, stops, rapid acceleration and deceleration, much harsher than steady state testing.
The new stack design incorporated a 30% reduction in platinum catalyst loading with no reduction in performance. Baseline catalyst loading was reduced from approximately 1 mg/cm2 to approximately 0.7 mg/cm2. Meeting performance, durability and freeze-start requirements is more difficult with less platinum catalyst. “This is a significant development that moves us well along the path towards meeting our reduced cost targets, since platinum is one of the most expensive components in a fuel cell stack,” said Dr. Stone.
Freeze start capability, increased durability and cost reduction were identified as three of the crucial performance goals set in 2003 by the U.S. DOE when it launched a $350 million, five-year funding program targeted at making hydrogen-fueled vehicles a commercial reality by 2015. More than half of the announced demonstration fuel cell vehicles to be funded by the U.S. DOE program will be powered by Ballard fuel cells. Ballard-powered fuel cell cars and buses accumulated more than 925,000 kilometers in 2004, more than any other fuel cell developer.
“This on-road experience is critical to improving our current technology and advancing the development of our next generation fuel cell stacks,” said Dr. Stone. “In April, we plan to roll out our technology roadmap, which highlights key technology milestones we intend to meet on the path to developing commercially viable automotive fuel cell stack technology by 2010.”
Loading...