Ceramic Fuel Cells Regulatory News (CFU)

23 Apr 2007 07:00

Ceramic Fuel Cells Limited23 April 2007 23 April 2007 CERAMIC FUEL CELLS LIMITED TRADING UPDATE FOR QUARTER ENDED 31 MARCH 2007 Ceramic Fuel Cells Limited ("CFCL" or the "Company"), a leading developer ofsolid oxide fuel cells for micro-combined heat and power (m-CHP) units, todayannounces its trading update and cashflow statement for the third quarter ended31 March 2007. Highlights of the quarter: • Signed a three way product development agreement with EWE AG and Bruns Heiztechnik GmbH (Bruns) for the German residential market. • Engaged a contractor to install and commission equipment at the Company's ceramic powder plant in Merseyside, UK. • Net operating cash outflow of A$3.3 million / £1.3 million (Q2: A$4.8 million / £1.9 million). • Net cash and financial assets at 31 March 2007 of A$68 million / £27 million. Since the quarter end: • Signed an agreement with Julich Research Centre of Germany (FZ Julich) to collaborate on researching and developing applications for solid oxide fuel cell systems, and to award an annual student prize for special achievements in fuel cell development. • Launched GennexTM, CFCL's fuel cell module comprising a metal-ceramic fuel cell stack plus balance of plant components, at the Hannover Fair. Brendan Dow, Managing Director of Ceramic Fuel Cells, said: "With both utility and appliance partners now secured in the key Europeanmarkets of Germany and France, the Company has clearly moved into the ProductDevelopment phase of its commercialisation strategy. The launch of GennexTM atthe Hannover Messe this month represents an important milestone, demonstratingthe Company's ability to deliver commercially focused products. CFCL alsocontinues to address critical technology areas such as improved stackreliability and power density. An important element underpinning acceleratedstack reliability testing, is the collaboration with Julich who haveconsiderable expertise in lifetime modelling, metals technology and fuel cellapplications. We expect this collaboration to assist in reducing technology riskand speed up development of commercial products. Finally, the progress withequipment installation and commissioning at our Powder manufacturing facility inMerseyside UK is evidence that CFCL can deliver its technology while effectivelymanaging the risks associated with transferring processes from the laboratory tocommercial scale". For further information please contact: Ceramic Fuel CellsAndrew Neilson Tel: +61 419 950 771Brendan Bilton Tel: +44 (0) 7798 554 191 Email: investor@cfcl.com.au Hogarth Partnership Tel: +44 (0) 20 7357 9477Nick DentonSarah MacLeodSarah Richardson About CFCL Ceramic Fuel Cells Limited is a leader in developing solid oxide fuel cell(SOFC) technology which can provide reliable, energy efficient, high-quality,and low-emission electricity from widely available natural gas and renewablefuels. CFCL is developing SOFC products for small-scale on-site micro combinedheat and power (m-CHP) and distributed generation units that co-generateelectricity and heat for domestic use. CFCL is listed on the London StockExchange AIM market and the Australian Stock Exchange (code CFU). www.cfcl.com.au Financial Review Net operating cash outflow for the third quarter was A$3.3 million, which waslower than the previous quarter, due to slightly lower expenditure on staffcosts and product development costs and higher interest payments received.Receipts from customers were lower than the first and second quarters, due tothe timing of field trial unit shipments. Further field trial units,incorporating the Company's metal-ceramic fuel cell stacks, will be shippedduring the second half of the calendar year. As expected, capital expenditure was higher in the quarter as the Companyupgraded its Melbourne plant and commissions its UK powder plant. Capitalexpenditure was A$2.2 million for the third quarter, as against A$1.5 millionfor the second quarter. Total cash and financial assets at the end of the quarter was A$68 million. Operational Review Product development agreement with EWE and Bruns As previously announced, in March 2007 the Company signed a three-way productdevelopment agreement with EWE, one of Germany's top five energy suppliers, andBruns Heiztechnik GmbH (Bruns), a specialist German boiler manufacturer. CFCL received an initial order for its field trial demonstration units from EWEin July 2005. At that time CFCL and EWE also signed a letter of intent tocommercialise fuel cell based m-CHP units. In June 2006, CFCL received a secondorder from EWE, for ten NetGenTM prototype units, as part of an ongoing fieldtrial program. Under the terms of the new product development agreement, CFCL will collaboratewith Bruns to design and construct fully integrated 1kW m-CHP units to meetEWE's specifications for the German residential market. The first stage of the project is to design and operate an 'Alpha' unit, wherebya CFCL NetGen unit, a Bruns high efficiency condensing boiler and a thermalstore (water tank) will be integrated and operated via a single control unit.Work on this stage has begun and is expected to be completed in 2007. The secondstage is to create a near-commercial 'Beta' unit, comprising a single physicalunit in which a CFCL fuel cell module is fully integrated with a Bruns boiler,without the thermal store. This agreement follows a similar product development agreement the Companysigned in December 2006 with Gaz de France and De Dietrich Thermique for theFrench market. Product development agreement with Gaz de France and De Dietrich Thermique The Company continues to make good progress on the French product developmentproject with Gaz de France and De Dietrich Thermique, and we look forward toproviding further updates on progress later in the year. Collaboration agreement with Julich Research Centre of Germany As announced on 17 April, since the quarter end the Company has signed anagreement with Julich Research Centre of Germany (FZ Julich) to collaborate onresearching and developing applications for solid oxide fuel cell systems. CFCLwill also award an annual student prize for special achievements in fuel celldevelopment. FZ Julich is one of the largest research institutions in Europe, with more than4,000 staff, students and researchers and an annual budget of more than 360million Euros. FZ Julich has been carrying out R&D in solid oxide fuel cellsystems since the mid 1990s, including a strong focus on high-poweredanode-supported cells. Research projects to be conducted under the framework agreement are likely toinclude materials development, such as high-performance metals, and acceleratedlifetime testing and modelling. Launch of GennexTM fuel cell module at Hannover Fair In April CFCL launched 'GennexTM', CFCL's fuel cell module comprising ametal-ceramic fuel cell stack plus balance of plant, at the Hannover Fair, oneof the largest trade fairs in the world. The GennexTM name distinguishes CFCL'snew metal-ceramic stacks from the prior all-ceramic stacks. GennexTM is a 1kWfuel cell module which is designed for integration inside m-CHP units and otherappliances. Fuel Cell Foundry The Company is continuing its progress on the fuel cell manufacturing facilityplanned for the Oberbruch industrial park in Heinsberg, Germany. The owner andmanager of the site, Nuon, is undertaking site works on the building leased byCFCL. Nuon is also assisting CFCL in the process of obtaining environmental andplanning consents. During the quarter the Company recruited local projectmanagement staff who are scheduled to start work at the Heinsberg site in May.The Company is also continuing to finalise its project plans, including thescale up of the plant and the project timing and cost. The Company will continue to update shareholders on progress during the year. Powder plant In January 2007 the Company secured a site on an industrial park in Bromborough,Merseyside, UK, for the development of a ceramic powder plant. In March theCompany engaged an installation contractor, and on-site works began in April.Equipment installation is due to finish in July. The installation andcommissioning project is still scheduled to finish by the end of September 2007. The Company has two managers based at the Bromborough site to oversee theinstallation and commissioning. Melbourne facility As announced in the previous quarter, the Company is upgrading its manufacturingplant and expanding its capacity at Noble Park, Melbourne, to make the newmetal-ceramic fuel cells and balance of plant components. Some of the equipment being upgraded includes a new semi-continuous furnace,laser cutting equipment, QC equipment suitable for continuous operation,furnaces for metal coatings and automated dispensing equipment for advancedseals. The bulk of this equipment was upgraded by the end of March 2007. Someequipment and processes will continue to be upgraded through to June 2007. Cell and Stack Manufacturing The Company is now manufacturing several metal-ceramic stacks per week utilisingits upgraded facilities in Melbourne. The key areas being addressed aredegradation and durability which are the key metrics for commercial fuel cells. GennexTM fuel cell modules, comprising these new stacks and balance of plantcomponents, will be integrated into NetGen units for delivery in 2007. In themeantime the Company is continuing to utilise its 'Gen4' all-ceramic stacks inits existing field trial units. ENDS This information is provided by RNS The company news service from the London Stock Exchange