Ballard Power Systems Faces Headwinds in Q3 2024, Announces Restructuring
Vancouver, BC – November 5, 2024 – Ballard Power Systems (BLDP) today reported its consolidated financial results for the third quarter ended September 30, 2024. The company revealed a challenging quarter marked by significant headwinds, including weak revenue, strained gross margin, and a slowdown in the adoption of hydrogen and PEM fuel cells.
Tough Quarter, Strategic Actions Taken
Ballard’s President and CEO, Randy MacEwen, acknowledged the difficult operating environment. “We had a tough quarter, marked by weak revenue, strained gross margin, soft new order intake, adverse order book adjustments, a restructuring charge of $16.1 million, and non-cash impairments totaling approximately $147.0 million,” he stated. “We have taken difficult but important actions to better align our spending with a multi-year push-out in market adoption of hydrogen and PEM fuel cells.”
To address these challenges, Ballard initiated a global corporate restructuring aimed at reducing annualized operating costs by over 30%. This restructuring involves a significant workforce reduction, rationalization of product development programs, consolidation of global operations and facilities, and a reduction in planned capital expenditures. The company also reduced its corporate cost structure in China and commenced a strategic review of its Chinese joint venture.
Gigafactory Expansion Delayed, Focus on Long-Term Growth
Ballard has also repositioned its Texas gigafactory expansion program to an optionality plan, delaying the final investment decision to 2026 pending clear market adoption and demand indicators. This decision allows the company to preserve over $94 million of awarded government funding while deferring significant capital investments during this period.
Despite the challenges, Ballard maintains its long-term conviction in the potential of hydrogen and PEM fuel cells to decarbonize select heavy mobility and stationary power applications. The company highlights compelling use cases where customers are drawn to the benefits of PEM fuel cells, including long range, fast refueling, heavy payload, and zero emissions.
Q3 2024 Financial Highlights
* Total revenue of $14.8 million, down 45% year-over-year, reflecting a slowdown in customer demand.
* Heavy Duty Mobility revenue of $12.8 million, down 38%, driven by lower revenues from Rail, Truck, and Marine verticals, partially offset by a 33% year-over-year increase in Bus revenues.
* Stationary revenue of $0.5 million decreased by 82%.
* Emerging and Other Markets revenue of $1.4 million was down 60%.
* Gross margin was a negative 56%, significantly lower than the previous year, due to lower revenue, revenue mix, and onerous contracts and inventory provisions.
* Total Operating Expenses were $54.9 million, an increase of 58% year-over-year, primarily driven by the restructuring charge and an impairment of certain trade receivables.
* Net loss from continuing operations was ($204.5) million, or ($0.68) per share, including $40.3 million of non-cash impairment charges on goodwill and $106.8 million of property, plant, and equipment impairment.
* Adjusted EBITDA was approximately ($60.1) million, significantly lower than the previous year, largely driven by lower revenue, weaker gross margin, and the restructuring charge.
Looking Ahead
While specific revenue or net income (loss) guidance for 2024 is not provided, Ballard expects revenue to be weighted to Q4. Total Operating Expense, excluding restructuring charges, and Capital Expenditure are expected to be at the low end of their respective guidance ranges. With restructuring charges included, Total Operating Expense is expected to be at the high end of the guidance range.
Ballard remains focused on its customers and controllables, including the development of next-generation, low-cost fuel cell products. The company is committed to maintaining disciplined spending and balance sheet strength for long-term competitiveness and sustainability.
Conference Call
Ballard will host a conference call on Monday, November 5, 2024, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to discuss the third quarter 2024 results. The live call can be accessed by dialing 1-844-763-8274, or via a live audio and webcast accessible through a link on Ballard’s homepage (www.ballard.com). Following the call, the audio webcast and presentation materials will be archived in the ‘Earnings, Interviews & Presentations’ area of the ‘Investors’ section of Ballard’s website (www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems’ vision is to deliver fuel cell power for a sustainable planet. Ballard’s zero-emission PEM fuel cells enable electrification of mobility, including buses, commercial trucks, trains, marine vessels, and stationary power. To learn more about Ballard, please visit www.ballard.com.
