The Ceres Power Holdings plc (LON: CWR) share price plunged by 15.1% after issuing a trading update for the six months ended 30 June 2023. The company expects to generate revenues worth £11 million compared to the £9.7 million generated in a similar period last year.
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The developer of solid oxide fuel cell technology for use in distributed power systems also revealed that it expects its gross margins to be 55%-60%, much higher than the 55% gross margins recorded last year. The company also highlighted its move to the main market of the London Stock Exchange from the AIM.
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Despite the upbeat financial data, Ceres Power's share price decline could be directly attributed to the delays the company has witnessed in its Chinese Joint Venture (JV) with Bosch and Weichai. The company noted that the delay was not within its control.
The Chinese JV partners are ready and willing to sign the agreement. Furthermore, the companies still need to allow time for regulatory clearances once they have signed the JV agreement.
Therefore, Ceres Power postponed the recognition of the potential revenues from the Chinese JV of about £15 million to 2024 instead of this year. The move did not go down well with investors, as evidenced by the decline in Ceres Power’s share price.
The company noted that Doosan's 50MW factory in South Korea was nearing completion. Ceres Power also revealed that Bosch's ‘Power Units' had received European funding of ~€160 million as an Important Project of Common European Interest (IPCEI).
Phil Caldwell, the CEO of Ceres Power, 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. I look forward to sharing further updates in the coming months.”
*This is not investment advice.
Ceres Power share price.
The Ceres Power share price plunged 15.13% to trade at 332.60p, from Monday’s closing price of 391.90p.
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