(Sharecast News) - Ceres Power surged on Thursday after it signed a global long-term manufacturing collaboration and licence agreement with Taiwan's Delta Electronics for both solid oxide electrolysis cell (SOEC) and solid oxide fuel cell (SOFC) stack production.
The agreement includes revenue of £43m to Ceres through technology transfer, development license fees, and engineering services, around half of which is expected to be recognised as revenue in 2024.
Ceres said there is potential for additional revenue from the sale of its development stacks to Delta. The agreement also includes royalty payments to Ceres on future commercial production and sale to end customers by Delta.
Ceres chief executive Phil Caldwell said: "It's great to announce a new partnership today with Delta, a company with worldwide expertise in mass manufacturing, power electronics and system integration.
"We believe Delta can deliver efficient clean hydrogen solutions for its customers utilising both our SOFC and SOEC technologies. Green hydrogen has a key role to play in delivering a more secure and sustainable future energy system and today we take this first step towards what promises to be a strong collaboration with Delta to accelerate the industry globally."
At 1150 GMT, Ceres shares were up 40% at 212p.
Berenberg said: "Importantly, in our view, the agreement underpins 2024 revenue estimates with some potential for upside versus the headline figure before manufacturing is expected to start in late 2026. This is a very positive update from Ceres, in our view, demonstrating delivery from its pipeline of potential partners and also its first agreement related to the SOEC technology."
The bank, which rates the shares at 'buy', said it was making minor changes to its forecasts and continues to believe in Ceres's "differentiated offering and long-term business model".
Ceres Power (CWR)