Vancouver-based Ballard Power Systems may have missed analyst estimates in the fourth quarter and 2020 as a whole, but the company’s stock price continued to rebound with the release of its financials on 10 March. The day before, Ballard announced a hydrogen fuel-cell deal with Canadian Pacific (CP), one of the two largest railroad companies in Canada.

Ballard reported total revenue of $103.9mn last year, a decline of 2pc compared with 2019, with business retarded by the global Covid-19 pandemic. This in turn contributed to a net loss from continuing operations of $49.5mn in 2020, compared with a loss of $35.3mn the previous year.

The company’s valuation is approximately 70 times revenues—despite a significant retrenchment in stock prices earlier this year, following a massive jump since early 2020—a sign Ballard remains a so-called story stock, not one as of yet backed by business fundamentals.

“Notwithstanding a challenging year due to Covid-19, the hydrogen and fuel-cell industry enjoyed unprecedented progress with strong policy support, sizeable corporate investments and broadened investor interest” MacEwen, Ballard

“Notwithstanding a challenging year due to Covid-19, the hydrogen and fuel-cell industry enjoyed unprecedented progress with strong policy support, sizeable corporate investments and broadened investor interest,” says Randy MacEwen, president and CEO of Ballard. “As a result, we are increasing and accelerating our investment to drive high growth, high market adoption and high market share for the benefit of long-term shareholder value.”

Ballard is planning in 2021 to continue to focus on medium and heavy-duty automotive applications—including bus, commercial truck, train and marine markets—especially in key regions such as China, Europe and California. The company did not provide financial guidance for this year due to ongoing uncertainties related to the Covid-19 pandemic.

CP deal

Ballard’s deal with CP supports the railroad operator’s Hydrogen Locomotive Program to convert a diesel-powered freight locomotive to a hydrogen-powered one, a first for North America. Ballard will deliver six of its 200kW proton exchange membrane fuel-cell modules to CP this year, to provide a total of 1.2MW of electric power for the locomotive, and support integrating the modules into the overall system as well.

"In addition to Ballard's work focused on powering commuter trains in Europe and urban trams in China, CP's Hydrogen Locomotive Program in North America underscores the strong fit for zero-emission fuel cells to power heavy and medium-duty motive applications, including trains, for which it is otherwise difficult to abate emissions," Ballard’s MacEwen said in a statement.

Ballard estimates the global market for hydrogen fuel-cell power components for trains will reach $4bn by 2030, compared with $13bn for marine transportation, $14bn for buses and coaches, and $100bn for medium and heavy-duty trucks.

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Author: Vincent Lauerman