The Mississauga-based company is negotiating with global players as it seeks to bolster its balance sheet and generate revenue by tapping into the gas industry's hunger for cheap power and alternative fuel sources, Pierre Rivard told shareholders at the firm's annual meeting.

Rivard said the alliances will play a key role as Hydrogenics continues to develop a market for industrial gas.

The company provides on-site hydrogen-fuelled power generators - as well as fuel cell and mobility products such as forklift - to transportation, industrial and renewabble energy customers.

Last week, Hydrogenics announced a five-year deal to supply German industrial gas firm Linde AG with on-site hydrogen generators, and is targeting "secure preferred supplier agreements with at least four of the world-leading merchant gas companies," Rivard said.

"We believe that we are at the transition point towards a diversified base for energy systems in the world and we believe that synthetic fuels will increasingly emerge as a solution to some of the volatility we've seen in the markets," Rivard said.

"These opportunities do not depend on the emergence of a hydrogen economy to continue to grow and flourish," he said.

Rivard said cost reductions over the year will allow for expanded development this year and that the company's cash will sustain Hydrogenics for about four years at its current run rate.

While Hydrogenics does not provide earnings guidance, Rivard said he expects the company will meet or exceed internal targets for revenues this year in each of its business units as demand for alternative fuels increases as oil and gas prices continue to increase.

"But this is really our goal for this year: the minimizing of EBITDA loss without exceeding business unit targets and we want to reduce the warranty costs to improve quality measures moving forward," he said.

"We believe that we are at the transition point towards a diversified base for energy systems in the world and we believe that synthetic fuels will increasingly emerge as a solution to some of the volatility we've seen in the markets."

Last week, Hydrogenics reported a reduced first-quarter loss of $8.3 million US from $11.2 million US a year ago as new orders rolled in.

Revenues, however, fell 46 per cent to $6.1 million US, due primarily to production delays at its on-site generation group.

Shares in the company were down 18 cents, more than five per cent, at $3.19 Cdn in afternoon trading on the Toronto Stock Exchange.

Brian Piccioni, an analyst for BMO Nesbitt Burns, said that the fuel-cell industry has several hurdles to overcome.

"The major challenge, if you're in that business, is commercial application. Not just government grants, but actual customers," he said.

Piccioni said that while fuel cells are efficient and don't have any immediate dangerous emissions, they're "staggeringly expensive and have a fairly short life expectancy."

Fuel-cell companies are confident they can lower the price and extend the life of their products, Piccioni said.

Hydrogenics has slated this fall to release date their latest alternative fuel source. The company plans to unveil an integration of their new S-4000 hydrogen generation product into an electrolyzer later this year.

Rivard also hinted a future announcement with a mining company.

"Hydrogen might be a unique solution for these remote mining sites when you couple it with wind to actually manufacture your fuel on-site," he said.