LONDON (Alliance News) - Ceramic Fuel Cells Ltd, which is in the process of raising up to AUD13.7 million in a rights issue for product development and sales and marketing, Wednesday said it sold 23 units in its fiscal first quarter, down from 49 a year earlier.
The company makes small-scale generators that use proprietary fuel cell technology to convert natural gas into electricity and heat for homes and small commercial buildings. It is focused on developing a product that can undertake thermal cycling.
It blamed the fall in unit sales on its decision to decided to reduce the direct sales force in Germany and concentrate resources on appointing distributors and installers to do the direct selling as well as concentrate on large, project-based sales.
The company had previously cautioned that its current level of sales will not sustain the business and it focused its limited sales resources on large, project-based sales.
"Development of these large-scale projects is progressing and the Board remains confident that a number of these targeted projects will be converted into orders in the near future. It is also anticipated that bringing a number of these to a successful conclusion will demonstrate clear market potential for this type of contractual structure," it said in a statement Thursday.
Ceramic Fuel Cells is also pursuing potential strategic partnerships with a number of key distribution partners in Europe, Asia and North America, and has also been approached to develop larger capacity units for some markets.
"Such developments require additional resources and discussions continue with a number of organisations to secure the appropriate financial support. These activities may lead to the company becoming a multiple product business," it reiterated.
The company said it installed its first two BlueGEN units in China in its fiscal first quarter to end-September. The units were installed with an unnamed energy sector company listed on the Hong Kong Stock Exchange, and both units are currently running at greater than 60% electrical efficiency, Ceramic Fuel Cells said.
Ceramic's shares fell sharply late last month when it announced a three-for-five rights issue to raise about AUD13.7 million, money it will use for working capital, increased sales and marketing spend, to fund research and product development, and drive down manufacturing costs by doing more engineering.
Earlier this week it said it has extended the closing offer date for the rights issue to November 12, from October 29.
In its statement Wednesday, the company said it was continuing to manage its operating costs at 20% below those of seven months ago. Its cash position on September 30 was AUD1.4 million, or GBP0.8 million, while cash outflow during the quarter was AUD4.6 million, or GBP2.5 million.
It expects to get a research and development tax refund of about AUD4.1 million in the fourth quarter.
"The board continues its strategic review of the company's financial and operational needs along with its pursuit of joint venture possibilities with partners who are willing to pay for the company's technology or can add significant synergies to the company's operations," it said.
Ceramic Fuel Cell shares were down 1.2% at 0.370 pence on AIM Wednesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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