VANCOUVER, BC - Ballard Power Systems (TSX:BLDP) (NASDAQ: NASDAQ:BLDP) (TSX: BLDP) has entered into a major supply agreement with European bus manufacturer Solaris Bus & Coach sp. z o.o., marking the largest order in Ballard's history. The Long Term Supply Agreement (LTSA) outlines the delivery of 1,000 hydrogen fuel cell engines to be used in transit buses across Europe by the end of 2027.
The deal not only reaffirms but also expands upon the existing relationship between Ballard and Solaris, with the order encompassing around 300 fuel cell engines from prior agreements and an additional 700 engines. This new commitment also includes after-market and extended warranty services. The engines, primarily the FCmove®-HD 70 kW model, along with the FCmove®-HD+ 100 kW version, will cater to both 12-metre and 18-metre bus markets.
Deliveries are set to commence in 2024 and will continue through 2027. These engines are slated for deployment in numerous European cities where Solaris buses powered by Ballard's technology are already in operation. The push for zero-emission public transportation has gained traction in Europe, supported by policies and regulations aimed at reducing urban fleet emissions. Hydrogen fuel cells offer a zero-emission alternative with the benefits of quick refueling and long-range capabilities.
Randy MacEwen, Ballard's President and CEO, highlighted the agreement as a pivotal moment for the partnership, which has spanned over a decade, and for the broader adoption of fuel cell buses in Europe. Javier Iriarte, CEO of Solaris, expressed enthusiasm for the continued collaboration with Ballard, noting Solaris's role in the expanding hydrogen fuel cell bus market in Europe.
Ballard Power Systems specializes in proton exchange membrane (PEM) fuel cells, which are employed in various modes of transportation, including buses, trucks, trains, marine vessels, and also in stationary power applications. The company's vision is to deliver sustainable, zero-emission fuel cell power.
The information in this article is based on a press release statement from Ballard Power Systems.
InvestingPro Insights
Ballard Power Systems' landmark deal with Solaris Bus & Coach underscores the company's commitment to expanding its footprint in the clean energy sector. As Ballard positions itself to meet the rising demand for hydrogen fuel cell technology in Europe, certain financial metrics and professional insights can provide a deeper understanding of the company's current market standing.
InvestingPro Data reveals a market capitalization of $832.33 million, which reflects investor valuation of the company's growth prospects and market position. Despite the significant order from Solaris, Ballard's price-to-earnings (P/E) ratio stands at -6.25 on a last twelve months basis as of Q4 2023, indicating that the company is not currently profitable. Additionally, the gross profit margin for the same period is at -21.33%, suggesting that Ballard is experiencing challenges in maintaining profitability at the gross level.
According to InvestingPro Tips, Ballard Power Systems holds more cash than debt on its balance sheet, which is a positive sign of financial stability and may provide some cushion as the company invests in growth opportunities. However, it is also noted that the company is quickly burning through cash and has been marked by weak gross profit margins. With the stock price experiencing considerable volatility and trading near its 52-week low, investors may exhibit caution.
For those considering an investment in Ballard Power Systems, there are additional InvestingPro Tips available that could offer further insights into the company's performance and outlook. Currently, there are 11 more tips listed on InvestingPro, which can be accessed by visiting https://www.investing.com/pro/BLDP. To enrich your investment analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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