In a recent filing with the Securities and Exchange Commission (SEC), Ballard Power Systems Inc (NASDAQ:BLDP). has announced a follow-on order for approximately 20 megawatts (MW) of their fuel cell engines. These engines are destined for North American locomotives, as stated in the company's Form 6-K report, which was filed today, Thursday.
The company, currently valued at $434 million by market capitalization, has maintained a strong balance sheet with more cash than debt, according to InvestingPro data.
Ballard Power, recognized for its work in electrical industrial apparatus, is supplying these fuel cell engines to CPKC, a key player in the railway sector. This order marks a continuation of the company's relationship with CPKC and highlights the ongoing demand for clean energy solutions in the transportation industry. Despite reporting revenue of $92 million in the last twelve months, the company faces challenges with negative gross profit margins of -31.45%.
The details of the transaction were not disclosed in the filing, but the order is a significant step for Ballard Power as it continues to expand its presence in the clean energy sector. The company's fuel cell technology is an integral part of the shift towards more sustainable and environmentally friendly transportation options. With a current ratio of 9.01, the company maintains strong liquidity to support its operations.
This announcement comes at a time when industries across the globe are increasingly looking to reduce their carbon footprint. Fuel cells, which convert chemical energy from fuels into electricity through a chemical reaction with oxygen or another oxidizing agent, are seen as a crucial technology in the move away from fossil fuels.
According to InvestingPro analysis, the stock appears undervalued, though analysts have revised their earnings expectations downward for the upcoming period. For deeper insights into Ballard Power's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. The information for this article is based on a press release statement included in the SEC filing.
In other recent news, Ballard Power Systems (TSX:BLDP) has entered into a significant expansion of its collaboration with Canadian Pacific (NYSE:CP) Kansas City (CPKC). This new Long Term Supply Agreement (LTSA) entails Ballard supplying CPKC with 98 fuel cell engines, each with a capacity of 200 kW, cumulatively providing about 20 megawatts (MW) of power. The deliveries are scheduled for 2025. This agreement is a continuation of the partnership that began in 2021, which has already seen Ballard deliver approximately 10 MW of fuel cell engines.
Ballard Power Systems reported a challenging third quarter in 2024, with a decrease in revenue by 45% year-over-year, amounting to $14.8 million. In response to these challenges, Ballard announced a substantial restructuring plan, including workforce reductions and a delay in its Texas gigafactory expansion until 2026. However, the company secured orders for 280 fuel cell engines from New Flyer and a European bus OEM.
The restructuring efforts are projected to save over 30% in annualized operating costs. Despite the challenging financial environment, Ballard maintains a strong cash position, with a reported $635.1 million at the end of the quarter.
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