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FuelCell Energy secures $160 million deal in South Korea

EditorBrando Bricchi
Published 05/28/2024, 01:00 PM

DANBURY, Conn. and HWASEONG-SI, Korea - FuelCell Energy, Inc. (NASDAQ:FCEL), a global leader in fuel cell technology, has entered into a significant agreement with Gyeonggi Green Energy Co., Ltd. (GGE), a Korean energy company. The deal, announced today, involves the purchase of 42 upgraded 1.4-megawatt fuel cell modules by GGE for the Hwaseong Baran Industrial Complex, the world's largest fuel cell power platform.

The agreement includes a new seven-year service contract for FuelCell Energy to maintain the fuel cell modules. This partnership is set to generate approximately $160 million in revenue for FuelCell Energy over the term of the agreement.

Located in Hwaseong-si, the Hwaseong Baran Industrial Complex was established in 2013 using FuelCell Energy's design and technology. With a capacity of 58.8 megawatts produced by the fuel cell modules, the complex can power around 135,000 homes and generate hot water for heating about 20,000 homes annually.

FuelCell Energy's presence in South Korea aligns with the country's 2019 Hydrogen Economy Roadmap, which aims to produce 15 gigawatts of power from fuel cells by 2040. The company's technology contributes to South Korea's efforts to reduce air pollution from fine dust and particulate matter.

Jason Few, President and CEO of FuelCell Energy, expressed the company's commitment to delivering clean, efficient, and reliable energy solutions to the Korean market. He emphasized the importance of contributing to Korea's Hydrogen Economy Roadmap and the global standard for low to zero carbon power generation.

GGE CEO Kim Dae Young highlighted the role of the partnership in providing clean baseload power for Korean households and supporting the country's clean environment initiatives.

FuelCell Energy aims to expand its market share in Korea by focusing on new long-term service relationships and agreements. The company offers a range of clean energy solutions, including power generation and distributed hydrogen production, as well as carbon capture and electrolysis technologies.

The information for this article is based on a press release statement from FuelCell Energy, Inc.

InvestingPro Insights

FuelCell Energy's recent deal with Gyeonggi Green Energy highlights its pivotal role in the Korean energy sector and the company's commitment to expanding its global footprint. Amidst this strategic move, it's vital to consider the company's financial health and market performance, which provides context for its operational capabilities and future prospects.

According to InvestingPro data, FuelCell Energy holds a market capitalization of $395.3 million, underlining its presence as a mid-sized player in the renewable energy industry. Despite a challenging revenue trend with a decrease of 24.12% over the last twelve months as of Q1 2024, the company has managed to secure a significant contract that could bolster future revenues.

InvestingPro Tips suggest that FuelCell Energy is facing financial headwinds, as analysts have revised their earnings downwards for the upcoming period, and the company is not expected to be profitable this year. Additionally, the stock has experienced high price volatility, which is characteristic of the renewable energy sector but may present risks for investors seeking stability.

However, there are positive aspects to consider. The company holds more cash than debt on its balance sheet, providing a degree of financial flexibility. Furthermore, FuelCell Energy's liquid assets exceed its short-term obligations, indicating an ability to cover immediate liabilities. These factors could reassure investors of the company's financial management amidst the revenue challenges.

For readers interested in a deeper dive into FuelCell Energy's financials and market performance, InvestingPro offers additional insights. There are 16 more InvestingPro Tips available, which can provide a comprehensive understanding of the company's position. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, to access these valuable insights and make informed investment decisions.

As FuelCell Energy forges ahead with its service agreement in South Korea, keeping an eye on these financial metrics and market trends will be crucial for stakeholders and potential investors looking to gauge the company's trajectory in a rapidly evolving energy landscape.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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