By Christoph Steitz and Tom Käckenhoff
DORTMUND, Germany (Reuters) -Thyssenkrupp Nucera, which makes electrolysers needed to produce green hydrogen, is confident it can reach its mid-term targets, sounding a much more positive note than peers in a sector that still largely depends on subsidies.
"Our water electrolysis technology as a means to decarbonise industry is in bigger demand than ever before," Chief Executive Werner Ponikwar told journalists at the group's first annual press conference since it listed in July.
"Our strong pipeline will drive future growth and finance and support our solid balance sheet."
The comments reflect optimism after investors took a more cautious stance on hydrogen stocks, concerned about a nascent technology that still depends on significant political support and low costs for renewables.
Since its listing in July, one of the biggest in Europe this year, shares in Thyssenkrupp (ETR:TKAG) Nucera have fallen more than a third.
However, they were up 4.3% at 1115 GMT on Monday after the group confirmed its mid-term outlook, which includes an operating break-even for its closely-watched alkaline water electrolysis (AWE) business.
The company, in which both Thyssenkrupp and Italy's De Nora own large stakes, said operating profit (EBIT) nearly tripled to 23.8 million euros ($26 million) in the 2022/23 year, exceeding an LSEG analysts' survey estimate of 16.5 million.
Analysts at Bernstein called the group's update "reassuring", particularly in light of recent negative news in the sector, including an order cancellation at Norwegian peer Nel last week.
Electrolysers can use renewable energy to separate hydrogen from water, and the hydrogen can then be used as an alternative to fossil fuels in hard-to-decarbonise industries - making it a potential growth market in global efforts to cut emissions.
Thyssenkrupp Nucera also reported a net financial position of 761 million euros, a key gauge for securing large contracts, which Deutsche Bank (ETR:DBKGn) said made the firm "arguably the electrolysis company with the best balance sheet."
The ramp-up of its AWE business will cause an EBIT loss in the mid-double-digit million euro range in 2023/24, the company, which also competes Britain's ITM Power and France's McPhy Energy, said.
This compares with an LSEG estimate for a 22.8 million euro loss.
Sales in the year to Sept. 30 are expected to grow by a mid double-digit percentage from the 653 million generated in 2022/23, the group said in line with a growth forecast of 51% from analysts polled by LSEG.
($1 = 0.9167 euros)