FuelCell Energy – Carbon capture offers great potential

Bridgeport
Installation in Bridgeport, USA, © FuelCell Energy

FuelCell Energy (Nasdaq: FCEL) has announced its financial results for the first quarter in 2018, ended Jan. 31. Total revenue amounted to USD 38.6 million, up from USD 17 million in 2017. The company posted a loss of USD 8.4 million, including USD 3.5 million in deemed dividends on preferred stock. Financial liquidity on the balance sheet date added up to USD 115.4 million, part of which is a USD 40 million revolving project financing facility by NRG Energy, a strategic partner. Contract backlog reached a record high of around USD 638.5 million. The inclusion of announced project awards will drive up the sum to USD 1.6 billion.

“Strong revenue, tremendous backlog and a strong balance sheet.”

Chip Bottone, CEO of FuelCell Energy

FuelCell Energy recently finished a 20-megawatt fuel cell power plant that it had built on behalf of Kospo in South Korea. The company could announce other fuel cell projects over the next months (see p. 12). For example, it is working on a 40-megawatt installation for the Long Island Power Authority.

Carbon capture

ExxonMobil is pinning its hopes for the sector on carbon capture and FuelCell Energy technologies, which promise 90 percent lower carbon dioxide and more than 70 percent lower nitrogen oxide levels. Success in the current pilot stage could lead to Exxon placing monumental orders that could generate nothing but excitement among fuel cell enthusiasts, I bet.

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Risk warning

Share trading can result in a total loss of your investment. Consider spreading the risk as a sensible precaution. The fuel cell companies mentioned in this article are small and mid-cap ones, i.e., they may experience high stock volatility. This article is not to be taken as a recommendation of what shares to buy or sell – it comes without any explicit or implicit guarantee or warranty. All information is based on publicly available sources and the content of this article reflects the author’s opinion only. This article focuses on mid-term and long-term prospects and not short-term profit. The author may own shares in any of the companies mentioned in it.

Written by Sven Jösting, February 2018

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