Clean energy tech company Ceres Power promises 2024 surge

Ceres Power (CWR) remains in the development stage of its business. Management says its agreements with major industrial partners such as Bosch and Linde (US:LIN) are progressing well, however, and sales are set to double in 2024. The fuel cell and hydrogen electrolyser company reported revenue of just £22mn in 2023, while higher spending took the operating loss up 10 per cent to £59.4mn. The R&D outlay kicked up 11 per cent to £54mn. 

The optimism for this year comes from a new deal to sell electrolyser and fuel cell technology to Taiwanese company Delta Electronics (TW:2308), worth around £20mn in sales for 2024. This will balance out “near-term delays in fuel cell royalties”, Ceres said. The shift to profitability is still a way off, however. Ceres makes money from royalties on equipment designs as well as equipment sales.

The company said increased broader spending on ‘green steel’, where renewably-produced hydrogen fuels electric arc furnaces, would boost its fortunes in Asia. But this is a very slow transition given the huge cost of the technology and need for new renewables capacity. The fuel cell business still provided all of the 2023 sales bar £757,000, although the Delta deal should even the two divisions out in those terms this year.  

Ceres has some time to keep building, thanks to its cash pile. This remained at almost £140mn as of 31 December, including £90mn in short-term investments. The scale of the holdings also helped the balance sheet last year, bringing in £7.1mn in finance income. The Delta deal revved up investors, taking the company's share price to over 250p in January, but the decline has continued since then, and the price has dropped 61 per cent in the past 12 months. Hold. 

Last IC View: Hold, 327p, 29 Sep 2023