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Q2 Figures: Plug Power Sales Above Expectations - Profitability Weak - Share Slumps

Münster / Latham, USA - Plug Power has published its figures for the first quarter of 2023 (Q1 23). Investors react disappointed, the share price of the RENIXX group collapses.

Fuel cell and hydrogen specialist Plug Power has significantly increased sales in the first quarter of 2023 compared to the same quarter last year and exceeded analysts' expectations, but at the same time extended its losses. Plug Power is being troubled by the high costs of building and expanding production capacity and expanding its product portfolio, which are impacting profitability.

Plug Power: sales climb to record level

Plug Power reported a significant 72 percent year-over-year increase in second quarter revenue to $260.2 million (Q2 2022: $151.3 million). Plug Power thus significantly exceeded analysts' expectations, who on average were expecting revenue of $238 million, while also posting its best quarterly figure. According to Plug Power, the record sales are based on various factors. First, it confirmed that its vertically integrated business model is gaining traction. In addition, the strong growth in the Material Handling business and the contributions of the new product lines were reflected.

Losses widened significantly

However, Plug Power's losses are significantly higher than analysts had expected. Due to the establishment and expansion of production capacities and the expansion of the product portfolio, costs and losses are also increasing. On balance, the net loss in Q2 2023 is a negative $236.4 million (Q2 2022: negative $173.3 million). Per diluted share, this translates to a loss of minus $0.40 in the second quarter, up from minus $0.30 in Q2 2022. Analysts on average had expected a loss of only $0.266 per share.

Some of the high costs were related to a number of necessary investments that have positioned the company for future growth and improved profitability, including optimizing electrolyzer production, scaling the new Vista plant and introducing new application products, according to Plug Power. Other costs incurred included higher fuel costs due to unplanned maintenance on the hydrogen plant and increased hydrogen prices on the West Coast.

Forecast confirmed - outlook positive

Plug Power continues to target sales in a range between $1.2 billion and $1.4 billion for the current year. The Management Board is positive about the company's further development. The business outlook for the electrolysis business remains robust for both the product and project businesses. Plug Power says it is currently pursuing projects in the electrolyzer sector with a capacity volume of over 7.5 GW, for which final investment decisions (FID) are expected in the next 12-18 months.

Plug Power is optimistic about the company's medium-term development. Within the company, Plug Power said it remains focused on building a global green hydrogen ecosystem and achieving its growth targets, expanding its profit margin and moving toward profitability.

Disappointing earnings performance puts pressure on shares

Investors reacted huffily to Plug Power's reported numbers, with bottom-line disappointment outweighing the quarterly loss. The share slumped on yesterday's trading day, losing 16.3 percent to 8.27 euros (closing price, 10.08.2023, Stuttgart Stock Exchange).

Source: IWR Online, 11 Aug 2023