The net loss of fuel cell and clean energy solutions provider Ballard Power Systems narrowed to $34.4 million in the fourth quarter (Q4) of the financial year (FY) 2022 from a net loss of $43.8 million in the same quarter of 2021.

Ballard attributed its net loss reduction to higher finance and other income of $27.1 million due to increased investment income of $8.8 million.

However, the company’s quarterly revenue declined 44% year-over-year (YoY) to $20.5 million due to lower revenue from the heavy-duty motive and technology solutions.

The company’s sales were impacted by lower sales of its primary revenue earner, heavy-duty motive. The revenue fell 59% YoY to $9.2 million due to lower fuel cell product shipments in China and Europe.

Additionally, the company said that other reasons for the lower net loss were higher income tax recoveries of $2.8 million, lower acquisition-related costs of $1.5 million, and a lower stock-based compensation expense of $0.8 million.

It was further aided by an improved mark-to-market and foreign exchange impact of $13.2 million on the company’s long-term investments.

“In Q4, we delivered revenue of $20.5 million and a gross margin of (29)%. On revenue, we continue to be disappointed with delayed adoption in the China market and low activity levels at the Weichai-Ballard JV, which weighed on our 2022 results. We are working closely with our Weichai-Ballard JV to unlock growth in the China fuel cell bus and truck markets,” Ballard’s President and CEO Randy MacEwen said.

The adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) came in at negative $46.4 million compared to $25.5 million in Q4 of FY 2021.

During Q4, Ballard received approximately $52.2 million of new orders and delivered orders valued at $20.5 million, resulting in an order backlog of approximately $133.4 million at end-Q4.

The growth in order backlog growth was driven predominantly by increased orders from Europe, which now represent approximately 64% of the total order backlog, compared to approximately 38% at the end of Q4 2021.

Full-year 2022

Ballard’s net loss for FY 2022 widened to $173.5 million compared to $114.4 million in the previous year primarily driven by increased operating expenses.

The company’s total operating expenses in 2022 increased by 43% to $145.8 million from $102.1 million in 2021.

The total revenue from fuel cell products and services fell by 20% to $83.8 million compared to $104.5 million. Ballard said that the fall in revenue was primarily due to a 25% drop in heavy-duty motive revenue, which amounted to $38.9 million in 2022.

The company’s adjusted EBITDA loss widened to $144 million in 2022.

Last year, Ballard Power Systems secured a fuel cell module order from Medha Servo Drives, a rail system integrator, to develop India’s first hydrogen-powered trains. The two retrofitted diesel-electric commuter trains developed for Indian Railways would integrate 8 units of 100 kW FCmoveTM-HD+.

The company posted a net loss of $42.88 million in the third quarter of 2022, a YoY increase of 39%.