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Ballard Power Systems test faclity in Burnaby

Despite continued losses, fuel-cell maker Ballard Power Systems reports progress in key milestones toward profitability

Ballard Power Systems announced earlier this week that both revenue and gross margins improved in the first quarter, and confirmed its full-year projection of revenue growth in excess of 30 per cent and EBITDA improvement in excess of 50 per cent.

The company recorded a loss of US$8.4 million for the quarter, on revenue of US$12.3 million. That compares to a loss of US$8.5 million on revenue of $10.1 million for the same period in 2012.

In 2012 Ballard lost US$43.5 million, on revenue of US$43.7 million.

“Q1 results reflect a positive start to the year for Ballard, with a markedly stronger balance sheet and improvements in all key financial performance metrics,” said John Sheridan, president and CEO.

The Q1 financial report marks the first time Ballard has broken out revenue from its engineering services division, reflecting the importance of an agreement announced in the quarter with Volkswagen Group to help develop fuel cells for use in Volkswagen demonstration cars. The agreement is worth between $60 million and $100 million over four years.

The Volkswagen agreement, however, has yet to make a sizeable impact on the balance sheet. For the quarter, engineering services generated revenue of $2.6 million, a decrease of 22 per cent over the same period a year earlier.

The company reports it is hitting milestones on its path to profitability, a goal it has achieved only once in its 24-year history: in 2008, when it sold the assets of its automotive division to Daimler Ford. The company reports improvements in gross margin, operating costs, adjusted EBITDA, net income and cash reserves.