SFC Energy: Black Figures with Fuel Cells

Last Updated: 30. November 2023By

Shares in fuel cell companies from the secondary market have performed very poorly in the past two years. Mostly rightly so, as many highly deficit companies have not been able to meet the ambitious expectations. But there is an exception, which however has not yet been appreciated by investors: SFC Energy is growing strongly and has already reached the profit zone.

Brief Profile of SFC Energy: SFC Energy is one of the leading providers of methanol and hydrogen fuel cells for stationary and mobile power supply solutions. Over the past two decades, the company based in Brunnthal near Munich has sold over 65,000 fuel cells. The fuel cells are used for example in mobile phone masts, measuring stations and motorhomes. SFC Energy has locations in Germany, Canada, USA, India, Romania and the Netherlands.

Strong figures and significant increase in annual forecast: The figures for the third quarter and the first nine months of the current year were very good. In the first three quarters, sales rose by +38% to 88 million euros. The adjusted operating result more than doubled to 7.6 million euros.

With the publication of the figures, the management of the company listed in the SDAX small stock index significantly increased its forecasts for the full year. Revenues for 2023 are now expected to be between 115 and 117 million euros (previous forecast: 107 to 111 million euros). The lower end of the range is now expected to be 7.5 to 8.6 million euros, compared to 5.0 million euros previously.

Business in North America and India booming: Expansion of the North American business has paid off for SFC Energy. In this region, sales rose by 47% due to increasing demand for fuel cell solutions for industrial applications. With a 46% share of total sales, North America has become the company’s main sales region.

The Asia region is still a relatively small market for SFC Energy, with a sales share of 12%. However, it is here that the management has identified the next growth driver. In particular, SFC CEO Peter Podesser sees great potential for the Indian market. Here, the company was able to increase its revenue in the current year 2023 by a whopping 80%. Of course, that’s on a relatively small base. But here SFC Energy has the opportunity for exponential growth that could give the sales region immense significance in the coming years.

Growth accelerates, black figures achieved: Sales growth is high and even accelerating. Analysts predict a doubling of sales and a tripling of profits within just two years (2023-2025).

Above all, in terms of profit, SFC Energy stands out from more well-known fuel cell stocks such as Ballard Power or Plug Power, which are still far from reaching the profit zone.

Speculative stock with great potential: The current market value is just under 300 million euros. That’s only twice the expected sales for the coming year. One reason for the favorable valuation is certainly the headwind that the fuel cell industry is currently facing. The SFC share cannot escape this very negative industry environment, although the price losses here, unlike the competition, are limited. If the mood turns, the share offers a lot of potential for profit. But of course it is a rather speculative value.