Aug. 19 (Bloomberg) -- Ceramic Fuel Cells Ltd., an Australian maker of clean-energy technology for homes and businesses, will cut costs and revise its sales structure following mounting losses.
The loss widened by 8 percent to 11.8 million pounds ($19.7 million) in the 12 months through June, while sales from continuing operations gained 43 percent to 3.4 million pounds, the Noble Park, Victoria-based company said today. The stock dropped as much as 12 percent in London trading today, valuing the company at 14.5 million pounds.
The company, which operates mainly in Germany, the U.K. and the Netherlands, tries to benefit from rising spending by consumers and businesses on clean-energy technology. Its BlueGEN generator, which converts natural gas into electricity, is “not yet economically viable,” CFU said today, adding that reducing the cost of manufacturing is key.
Instead of selling directly to individual customers, the company is now also trying to sell its products in bulk via distribution partners to larger-scale projects such as U.K. social housing initiatives. The company also said it may start selling more units to markets such as North America, China, Korea and Japan, provided “appropriate financial support can be secured.”
The company is working on several initiatives to cut costs, including the re-engineering of some components, new production methods and outsourcing of production to Asian countries such as Thailand, Chief Executive Officer Bob Kennett said in an phone interview today.
Today’s results “reflect the fact that it has taken them longer to get the volume produce up as quickly as expected, which would reduce the cost per unit,” Mirabaud Securities analyst John-Marc Bunce said via phone. CFU “continues to be in a bit of catch-22” as the company is consistently seeking fresh funds because it continues to lose money, he said.
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