Plug Power’s Losses Deepen Despite Cost-Cutting Measures

The company recorded $46.3 million in restructuring charges and impairments

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U.S.-based hydrogen fuel cell company Plug Power‘s loss-widening streak continued even after it announced cost-cutting measures following the resolution of going concern doubts in the previous quarter.

The New York-based company’s net loss widened 43% to $295.8 million in the first quarter of 2024 from $206.6 million last year, hurt by lower sales and restructuring charges.

Plug recorded $46.3 million in restructuring charges, impairments, and other provisions in the quarter as it implemented cost-cutting measures like headcount reductions and facility consolidations to improve its cash position.

Quarterly revenue declined by 43% year-over-year to $120.3 million, down from $210.3 million. The drop was attributed to seasonality in equipment sales and crimped equipment margins.

“We have faced challenges, particularly this quarter, with equipment margins due to strategic inventory reductions and… product sales,” said CEO Andy Marsh during a post-earnings conference call with analysts.

Meanwhile, operating loss widened to $259.4 million from $209.8 million a year ago, even as net cash used in operating activities and capital expenditures fell compared to last year as the company looked to conserve cash to fund its operations.

The company cited several initiatives aimed at improving profitability. With its Georgia and Tennessee hydrogen plants now producing at a combined 25 tons per day capacity, Plug said it could displace higher-cost third-party fuel with its own internal supply. Price increases across Plug’s product portfolio, especially for hydrogen pricing, are also expected to impact margins in the coming quarters positively.

Marsh stated the company is making “steady progress” in executing its goals despite the challenging market dynamics.

Plug aims to meet rising demand through its Louisiana plant coming online in 2024, bringing total internal hydrogen production capacity to 40 tons per day.

The company’s revenue rose by 27% in the previous quarter, allowing it to allay fears about its ability to continue operations. The company had said it had sufficient financial resources and liquidity to sustain its ongoing activities “for the foreseeable future.”

In the third quarter, however, its net loss had ballooned by 66% as delays in plan executions hurt the bottom line.

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