LONDON (Alliance News) - Proton Power Systems PLC on Tuesday announced a loan extension, a EUR630,000 fuel cell package order, and a more than doubled annual loss due to convertible loan interest.
The company designs and develops fuel cells and fuel cell electric carbon systems that have no carbon footprint.
The EUR630,00 order is for a 150 kilowatt fuel cell package - part of a project which involves producing hydrogen and providing power through hydrogen fuel cells so as to avoid power grid overload.
"The project involves the provision of the three key components (electrolysis, tank system and fuel cell) and will also include recovery of waste heat generated as a by-product of the processes, which is to be integrated into the heat management of real estate, municipalities or cities. Of these components Proton will deliver the complete containerised fuel cell system and other fuel cell related components," said Proton Power.
Proton Power has loans with Falih Nahab, brother of company director Faiz Nahab, and its principal shareholder, SFN Cleantech Investment Ltd. The loans have a total value of EUR65.4 million including interest.
The maturity of these loans has been extended by 12 months to December 2020. The loan from Nahab has also been increased to EUR41.1 million from EUR6.6 million. The annual interest on Nahab's additional loan is 10% and is not convertible.
However, the interest on existing facilities - including the existing loan provided by Nahab and the loan from SFN Cleantech - is convertible. Nahab is, via SFN Cleantech, a substantial shareholder in Proton power, making SFN Cleantech and Nahab both related parties to Proton Power.
The undrawn parts of the existing and additional loan are expected to let Proton Power meet its capital needs until June 2020. However, no net free cash is expected to be generated by Proton Power before this time so further loans are likely to be needed.
Turning to the annual results, Proton Power posted a GBP29.5 million pretax loss for 2018.
This was more than double its GBP13.7 million loss in 2017 and resulted from a GBP19.9 million fair value loss on embedded derivates in 2018 versus a GBP3.2 million fair value loss the year before. This loss on embedded derivatives relates to conversion of the interest on its loans.
Revenue was GBP822,000, down 25% from GBP1.1 million.
Non-Executive Chair Helmut Gierse said: "In the year ahead we are focused on progressing the maturity of the group technology offer, ramping up production capacity and exploiting the current potential sales pipeline. The current outlook at the end of 2018 looking into 2019 is more optimistic than that as prevalent at the end of 2017."
Shares in Proton Power were flat at 28.50 pence on Tuesday.
Proton Mtr Pwr (PPS)