Hydrogen fuel-cell maker Plug Power flags accounting errors

Plug Power shares plunged 14 per cent on Wednesday after the US maker of hydrogen fuel cells said it had identified accounting errors in several recent financial statements.

The company said late on Tuesday that it would not be able to file its annual report for 2020 by the March 16 deadline and would restate accounts for the 2018 and 2019 fiscal years, as well as for two quarterly filings in 2019 and 2020.

The news is a blow to the high-flying hydrogen sector, which has rallied on investor hopes that the gas could replace fossil fuels in a range of applications, from trucks to steelmaking.

Shares in Plug Power have surged more than 1,000 per cent over the past year, making it one of the best-performing clean energy companies.

Shares in other hydrogen-linked companies also fell on Wednesday, with UK-based ITM Power down 6 per cent and SFC Energy off 7 per cent.

Neil Beveridge, an analyst at Bernstein, said it could take a month for Plug Power to sort out its accounts, but the restatements would not have an impact on the company’s future potential. Plug Power’s customers include Amazon, Walmart and Home Depot.

“Fundamentally, we believe that the damage here is primarily reputational,” said Beveridge.

Plug Power said the matter, which was not the result of misconduct and would not hit business operations, involved “significant judgments” in how to apply US accounting rules relating to “non-cash” items such as the impairment of certain assets.

“Since our founding nearly 25 years ago, Plug Power has prided itself on operating with transparency and integrity, and we are working to resolve this matter quickly,” said Andy Marsh, chief executive. “Importantly, there is no expected impact to our cash position, business operations or economics of commercial arrangements.”

The news follows a period of rapid growth for Plug Power, which aims to build a network of green hydrogen-generating stations across the US. In January, South Korea’s SK Group agreed to invest $1.5bn in the company and a month later Plug Power raised $2bn in a share sale.

The company said it had first identified the problem while finalising an audit with KPMG after it had reported its fourth quarter 2020 results.

“The company has since re-evaluated its accounting and determined that it needed to correct the previous accounting for those items,” it said.

Shares in Plug Power last traded down $6 at $37.

Follow @ftclimate on Instagram

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here