Ballard Reports Q3 2024 Results
VANCOUVER, BC, Nov. 5, 2024 /PRNewswire/ - Ballard Power Systems (NASDAQ:BLDP) (TSX:BLDP) today announced consolidated financial results for the third quarter ended September 30, 2024. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS).
"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," stated Randy MacEwen, Ballard's President & CEO. "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."
Mr. MacEwen continued, "In Q3, we initiated a global corporate restructuring to reduce total annualized operating costs by more than 30%. We expect a substantial part of the annualized cost savings to be realized in 2025. Our restructuring includes a sizeable workforce reduction, rationalization of product development programs, consolidation of global operations and facilities, and a reduction in planned capital expenditures. As part of our global restructuring, we also reduced our corporate cost structure in China and initiated a strategic review of our China joint venture."
Mr. MacEwen further commented, "We have successfully repositioned our Texas gigafactory expansion program to an optionality plan, where we will defer our final investment decision to 2026 pending clear market adoption and demand indicators, while still preserving over $94 million of awarded government funding. With no material capital investments planned during this optionality period, we will reassess the underlying business case in 2026."
"With the backdrop of a challenging industry context, we had soft revenue and new order intake performance in Q3. We also removed previously booked orders valued at $39.2 million from our Order Backlog relating to certain high-risk markets and customers, including in China. Notwithstanding these challenges, Bus continues to be a notable bright spot, with Q3 revenue up 33% year-over-year. We remain encouraged with our continued customer progress in the Bus, Rail and Stationary markets in Europe and North America. Indeed, given current customer engagement in these markets, we expect a pick-up in new order intake in Q4, including from our recently announced supply agreement with New Flyer for 20 MW of fuel cell engines for the North American bus market."
"As we look to our long-term strategic plan and cascading capital allocation, we continue to have high conviction on hydrogen and PEM fuel cells playing an important role in decarbonizing select heavy mobility and stationary power applications. We see compelling use cases where customers are attracted to the differentiated PEM fuel cell value proposition of long range, fast refueling, heavy payload, and zero emissions. Our focus is on our customers and our controllables, including the development of next-generation, low-cost fuel cell products, while maintaining disciplined spending and balance sheet strength for long-term competitiveness and sustainability," concluded Mr. MacEwen.
Q3 2024 Financial Highlights
(all comparisons are to Q3 2023 unless otherwise noted)
Total revenue of $14.8 million in the quarter was down 45% year-over-year due to slowing customer demand, reflective of a push-out in the adoption curve for hydrogen and PEM fuel cells.
Heavy Duty Mobility revenue of $12.8 million was down 38%, driven by lower revenues from Rail, Truck, and Marine verticals and partially offset by Bus revenues of $11.2 million, which were up 33% year-over-year.
Stationary revenue of $0.5 million decreased 82%.
Emerging and Other Markets revenue of $1.4 million was down 60%.
Gross margin was (56%) in the quarter 45 points lower year-over-year as a result of lower revenue, revenue mix, and onerous contracts and inventory provisions.
Total Operating Expenses were $54.9 million in the quarter, an increase of $20.2 million or 58% year-over-year, primarily driven by a restructuring charge of $16.1 million and a $7.9 million impairment of certain trade receivables. Cash Operating Costs1 were $28.0 million, a decrease of (3%).
Net loss from continuing operations was ($204.5) million, or ($0.68) per share, which includes $40.3 million of non-cash impairment charges on goodwill and $106.8 million of property, plant, and equipment impairment. Excluding goodwill and other impairments, a Net Loss of ($57.5) million, or ($0.19) per share was recorded in the quarter compared to ($34.7) million, or ($0.12) per share, in the prior year period.
Adjusted EBITDA1 was approximately ($60.1) million, compared to ($34.9) million, a change of (72%), largely driven by lower revenue, weaker gross margin, and a $16.1 million restructuring charge.
Cash and cash equivalents were $635.1 million, a ($42.9) million decrease compared to $678.0 million at the end of Q2 2024.
Ballard received approximately $7.1 million in new order intake during Q3, while removing previously booked orders valued at $39.2 million from our Order Backlog relating to certain high-risk markets and customers, including in China, resulting in net new orders of ($32.1) million in the quarter. Ballard delivered orders valued at $14.8 million, resulting in an Order Backlog of approximately $122.7 million at end-Q3, a 28% decrease from the end of Q2 2024.
The 12-month Order Book, which was also impacted by delivery of orders in Q3, low new order intake, and the removal of previously booked orders, was $58.2 million at end-Q3, a decrease of $17.3 million, or (23%), from the end of Q2 2024.
Order Backlog ($M)
Order Backlog at End-Q2 2024
Orders Received in Q3 2024
Orders Removedin Q3 2024
Orders Delivered in Q3 2024
Order Backlog at End-Q3 2024
Total Fuel CellProducts & Services
$169.5
$7.1
$39.2
$14.8
$122.7
2024 Outlook
Consistent with the Company's past practice, and in view of the early stage of hydrogen fuel cell market development, specific revenue or net income (loss) guidance for 2024 is not provided. Similar to previous years, the Company expects 2024 revenue to be weighted to Q4. Total Operating Expense2, excluding restructuring charges, and Capital Expenditure3 are expected to be at the low end of their respective guidance ranges. With restructuring charges included, Total Operating Expense2 is expected to be at the high end of the guidance range. Total Operating Expense2 and Capital Expenditure3 guidance ranges for 2024 are as follows:
