Worldwide fuel cell sector revenues hit record high in 2006, but losses increase as companies continue R&D: PricewaterhouseCoopers report



    VANCOUVER, Sept. 25 /CNW/ - Aggregate revenues for publicly-traded
companies in the worldwide fuel cell sector rose 59% in 2006 over 2005 to a
record high of US$416 million, according to the latest PricewaterhouseCoopers
(PwC) annual Fuel Cell Survey, released today. Continuing a trend begun in
2003, the PwC survey found sales revenues exceeded spending on research and
development (R&D).
    The PwC 2007 Fuel Cell Survey, released in conjunction with the Tenth
Grove Fuel Cell Symposium in London, UK, examines the 2006 year-over-year
financial results of the world's 26 publicly-traded companies whose primary
business involves one or more of fuel cell production, systems integration,
and/or related fuelling infrastructure. The PwC survey, now in its fifth year
of publication, included six new companies: Heliocentris Fuel Cells AG
(Germany); Oxford Catalysts Group plc (UK); Proton Power Systems plc (UK);
Protonex Technology Corporation (US); SFC Smart Fuel Cell AG (Germany); and
Zongshen PEM Power Systems Inc. (Canada).
    Almost all of the revenues reported in the survey were from North
America-based companies. Quantum Fuel Cell Systems (US$193 million) retained
its spot as top revenue earner in the PwC Fuel Cell List for the second
consecutive year, followed by Ballard Power Systems (US$50 million), and
Distributed Energy Systems Corp (US$45 million). Outside of North America,
German company Smart Fuel Cell reported the most revenues (US$8 million),
followed by Heliocentris Fuel Cells, also of Germany (US$2.1 million), and
UK-based Proton Power Systems plc (US$1.9 million).
    None of the companies in the 2006 survey reported profits. Aggregate
losses of the sector increased to US$644 million in 2006 from US$371 million
in 2005.
    "The information PwC reviewed for the survey shows that, beyond the
financial numbers, fuel cell companies are working hard to deliver products
that meet customer demands for performance and cost," said John Webster, a PwC
partner and co-author of the survey. "Certain niche markets have begun to open
for fuel cell products and we expect to see product development and cost
reduction continue to challenge incumbent products."
    The total spending on R&D in 2006 was US$213 million, relatively
unchanged from the previous year. Companies in the PwC survey reported that
this expertise was primarily focused on next generation products and refining
technologies to lower costs, develop markets, and develop manufacturing
capacity.
    "The sector saw the public listing of five fuel cell companies in 2006,
three on the AIM exchange in London and two on the Frankfurt Stock Exchange,"
said Alastair Nimmons, a director in PwC's Advisory Services practice, and
co-author of the survey. "As we have seen in a few other sectors, European
markets seem to have a longer term investment horizon, available capital for
the fuel cell sector, and perhaps a keen appreciation of the future of clean
technologies."
    Global climate change is one more driver for the commercialisation of
fuel cells, but has also shed light on other clean technologies such as wind,
solar and bio-fuels. In some cases these technologies may compete for capital
with the fuel cell sector.
    Webster added: "There are and will be many opportunities for fuel cells
to collaborate with other clean technologies. Ultimately, however, the
entrepreneurial skill and drive of those building the sector will determine
whether fuel cells become successful on a commercial scale. It is critical
that the sector continues to refine its products and gain success in the early
markets."

    Other key findings from the PwC survey include:

    
    -   Overall market capitalisation for public fuel cell companies rose 20%
        in 2006 to US$3.8 billion. Ballard remained the most highly
        capitalised company at US$650 million, up 38% over 2005.

    -   Total net cash flow for the companies surveyed was negative
        US$71 million, an increase from negative US$12 million the previous
        year.

    -   Full time employment in the sector increased 10% to 3,434.
    

    Copies of the full survey report are available on-line beginning today
at: www.pwc.com/ca/fuelcellsurvey07. For more information on the PwC 2007 Fuel
Cell Survey or to arrange an interview with the authors to discuss the
findings, please contact Jim Nelson, PwC, Vancouver, at +1 (604) 806 7047, or
via email: jim.nelson@ca.pwc.com.

    PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance,
tax and advisory services to build public trust and enhance value for its
clients and their stakeholders. More than 140,000 people in 149 countries
across our network share their thinking, experience and solutions to develop
fresh perspectives and practical advice. Now celebrating 100 years of
excellence in Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its
related entities have more than 5,200 partners and staff in offices across the
country.

    "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership, or, as the context requires, the
PricewaterhouseCoopers global network or other member firms of the network,
each of which is a separate and independent legal entity.





For further information:

For further information: Jim Nelson, PricewaterhouseCoopers LLP, (604)
806-7047, jim.nelson@ca.pwc.com; Kristina Blissett, PricewaterhouseCoopers
LLP, +44 (0)20 7212 5133, kristina.blissett@uk.pwc.com

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