LONDON (Alliance News) - Ceramic Fuel Cells Ltd saw its shares drop early Tuesday after it posted a wider pretax loss for its last financial year as higher costs for manufacturing, installation and maintenance of its electricity generators more than offset a revenue increase.
The company, which develops small-scale electricity generators using fuel cell technology, reported a pretax loss of AUD25.4 million for the year to June 30, slightly wider than the AUD25 million loss it posted in the previous 12 months, even though revenue rose 43% to AUD6.1 million, driven by a rise in the number of units sold to 210, from 147 in fiscal 2013.
Ceramic fuel cells said that reducing manufacturing costs was a key focus after the AUD5.3 million it spent on making and selling units in the year helped push costs of sales, service and warranty up to AUD8.4 million, from AUD7.9 million in fiscal 2013.
"From June 2012 to June 2014 CFU has reduced the unit's standard cost by 29%. This remained a major focus during the year. The company remains confident that further cost reductions will ensue through the placement of volume orders for components as well as a combination of value engineering, process efficiency improvements and the outsourcing of manufacturing," it said.
Research and product development costs were AUD7.6 million, down AUD0.3 million on last year but still bigger than the company's revenue.
Ceramic said it has reviewed its sales strategy and has shifted to developing larger scale projects rather than focusing on direct sales. It said it is currently in talks over some UK large-scale project sales, primarily in the social housing sector.
Last month, the company said it had cut its net operating cash outflow during the fourth quarter of its last financial year as sales rose and it made progress on cutting costs, and it also said it is talks about developments that may lead to it becoming a multiple product business. It didn't give any update on those talks in its statement.
It is currently focusing its sales on the UK and Germany due to the fiscal incentives available for renewable energy sources in those countries, but said it continues to investigate product distribution options with potential partners in Europe, North America, China, Korea and Japan.
Ceramic shares were down 15.4% to 0.55 pence on Tuesday, making it the biggest faller on the London market.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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