IdaTech

US fuel cell developer IdaTech is putting all existing plans on the back burner in order to fulfil a surprisingly large new order from India.

Based in Bend, Oregon, IdaTech, which is 71%-owned by South African investment bank Investec, has developed fuel cells to act as back-up power for the telecoms market. Hitherto it has sold small quantities all over the world, generally between ten and 30 units at a time, so the order of over 10,000 from India-focused ACME Group represents a huge boost and has seen other development projects put on pause.

Last calendar year, IdaTech lost $16.3m (£11m) from $5.1m turnover, with September's interims to June showing revenues up 54% but losses increasing by $911,000 to $10.1m, due to increased staff costs and a large amortisation charge. CFO James Cooke says that cash burn levels ‘are likely to continue at the same level for the next 18 months’ as engineering capabilities are expanded in India.

ACME, a provider of energy saving products for the telecoms market, has ordered 10,000 5kW natural gas-fueled units to be delivered in 2009/10. IdaTech CEO Harol Koyama says the cost savings acquired from the large-scale production in India will bring the price down ‘well below’ the level required for mass adoption and ‘will make us competitive with diesel systems’.

However, with just $2m in the bank at the end of June, the loss-making and cash-guzzling business needs refinancing. ‘We will need further funding for us to get to cash breakeven in 2011,’ confirms Cooke, though he is confident that Investec will continue to provide funding support.

The future looks increasingly promising for IdaTech, but at present the risks are still rather high. One to watch, but avoid for now.

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