Plug Power, the stealth player in the race for green energy?
$PLUG+7.3% will borrow up to $1.5 billion to finance the construction of a hydrogen power plant. It is also expanding rapidly in Europe, with plans to invest $6 billion in three hydrogen plants off the Finnish coast.
The company, whose detailed numbers can be found here on Bulios by clicking here, came out with a report on its plans today, a summary also in the Flash News section. 😊
$PLUG+7.3% is an alternative energy technology provider focused on the design, development, commercialization and manufacturing of hydrogen fuel cell systems. Products are used in the industrial and stationary energy markets. Last week, it reported results for the quarter that were still less than ideal and the stock price fell further as a result. Their gross margins are still not positive, but that is expected to change by the end of the year.
Plug Power Inc.
PLUGPlug Power plans to borrow up to $1.5 billion over the next 18 months as the Latham producer focuses on expanding its network of hydrogen plants. CEO Andy Marsh confirmed this week that he is in late-stage negotiations to finance the $1 billion project through the U.S. Department of Energy's loan program. "We have a term sheet," Marsh told analysts during $PLUG'+7.3% s second-quarter earnings call. "And we're working through the final processes to get this structure approved."
Executives are in talks with "big banks" and others about financing options that could include everything from corporate bonds to investment tax credits. The company emphasized during its earnings call and in a letter to shareholders that its capital-raising strategy focuses on actions that don't dilute the value of its stock.
We are investing at a rate of about $1 billion a year to build "green hydrogen" power plants powered by hydroelectric, wind turbines and other non-carbon emitting sources to help industrial customers reduce emissions during operations. everything from fertilizer and chemical factories to forklifts and data centers.
$PLUG+7.3% is expanding rapidly in Europe, including a plan to invest $6 billion to build three hydrogen power plants off the Finnish coast over the next three years. In the U.S., Plug is building plants in Georgia, Louisiana, Texas and New York, with plans to expand an existing plant in Tennessee. The projects are progressing, but there have been some delays as one-off engineering and procurement projects have taken longer than expected to complete, which management says will allow them to straighten out financing.
All of this comes as the company works to reduce production costs and expand production capacity while striving to achieve profitability. "Navigating the process of scaling our business presents its own set of challenges," Marsh told analysts. "One of them has been our gross margin issues."
Plug posted a record $260 million in revenue during the second quarter, a 72% increase over the same three-month period last year. The company also posted a net loss of $236 million for the quarter. Management continues to expect Plug to record roughly 70% revenue growth in 2023, as sales are expected to be somewhere between $1.2 billion and $1.4 billion. By the end of the year, gross margins are expected to be positive!
"The journey of managing the construction of hydrogen plants, expanding production capacity, developing customers and simultaneously introducing a number of new products has undoubtedly been a challenging one," said Marsh. "However, we firmly believe that the efforts invested in these ventures will bring significant benefits to everyone involved in the success of Plug."
I included this company in my portfolio last week, for now only for a smaller volume but I will continue to follow them and I like this business model. Even though the whole world would have to come together to hunt for green energy and a better regard for the planet in general, which in certain amounts on Earth we don't see that yet, but I cheer for companies that are working to develop and go after similar business models. 🍀
And how do you investors view this industry? 😊
Great, thanks a lot for the tip. I see a lot of potential in this and when I see the situation and how most countries are trying to focus on this energy, the potential is there. So I will look at this company and when I get back from the Giant Mountains I will do an analysis and calculate the intrinsic value of the stock.
I certainly see the potential in this, I myself invest in Meyer Burger, a company that makes solar panels with minimal environmental impact. Plug Power is a very interesting company for me and I will consider buying it, I have been following the company since the Biden administration when the stock price took off. Now it has come down nicely, with their revenues rocketing.
https://www.cbinsights.com/company/plug-power/customers
I like the plugs, they're on my watchlist. They have developed a vertically integrated platform, GenKey, which provides customers with a complete solution from hydrogen supply to fuel cell service and they have a rich clientele. They have strategic partnerships with companies like Amazon, Walmart and BMW. For me, at least a company to watch if the numbers aren't already impressive to investors.
I see this sector as an opportunity for investors, but I don't have Plug in my portfolio, however, from what I have seen of the latest results, they are starting to reflect well. The year-on-year sales growth? Wow.