(Reuters) - Canada’s Hydrogenics Corp (HYG.TO) (HYGS.O) reported a much smaller-than-expected quarterly loss and said it expects to post its first-ever profit on an adjusted basis this year, indicating a rise in demand for its fuel cells used in power backup systems.
Nasdaq-listed shares in Hydrogenics rose as much as 8 percent to $22.50 in morning trading.
The company’s order backlog, often seen as a gauge of future sales, jumped 15 percent to $67.1 million in the second quarter ended June 30 from the first quarter.
Hydrogenics said the increase was mainly driven by a joint venture announced last month with a unit of South Korean conglomerate Kolon Corp (002020.KS) to power its renewable energy projects in the Asian country.
“We are trying very hard to get our first shipment out this year; we believe that is possible,” Chief Executive Daryl Wilson said on a post-earnings conference call, referring to the JV.
Analysts at Roth Capital Partners said the JV would lay the foundation for expansion into a key Asian market.
The company said earlier this month that it bagged a contract from Ontario’s grid operator.
Fuel cells convert hydrogen and oxygen into electricity and offer a cleaner alternative to lead-acid batteries. They are used in everything from power backup to forklifts to refrigerators.
Speculation has mounted about the sustainability of their business models even as some investors continue to buy into their clean energy promise.
Hydrogenics’ shares have risen 53 percent over the past year, including Wednesday’s gains. FuelCell Energy Inc (FCEL.O) and Ballard’s Nasdaq-listed shares have roughly doubled in the same period, while Plug Power’s stock has jumped 14 times.
Hydrogenics said on Wednesday it expects to achieve positive adjusted earnings before interest, taxes, depreciation for the year
“... We have visibility on a number of sizeable opportunities which could bring the backlog to well over $100 million within the next twelve months,” CEO Wilson said in a statement.
The company’s net loss narrowed to $125,000, or 1 cent per share, in the second quarter ended June 30, from $4.2 million, or 49 cents per share, a year earlier.
Analysts on an average had expected Hydrogenics to report a loss of 26 cents per share, according to Thomson Reuters I/B/E/S.
Ballard reported a smaller second-quarter loss on Tuesday, helped by continuing demand for its fuel cells that are used in electric buses and telecom networks.
Ballard’s customer Plug Power forecast in March its first-ever profit this year, but later said it no longer expects a profit due to a fall in orders in the first quarter.
Writing by Sayantani Ghosh in Bangalore; Editing by Maju Samuel