The hydrogen sector’s ongoing challenges came into sharp focus with Nel ASA’s latest quarterly report, which presented a conflicting picture of gradual operational improvements overshadowed by collapsing demand. The Norwegian hydrogen specialist’s recent performance highlights the broader industry’s struggle to gain commercial traction despite technological advancements.
Financial Performance Shows Mixed Signals
Nel ASA reported third-quarter customer revenues of 303 million Norwegian Kronen, representing a concerning 17% decline compared to the same period last year. Total income also contracted significantly, dropping from 391 million NOK to 349 million NOK. While these top-line figures disappointed market observers, the company did demonstrate some progress on profitability metrics.
The company’s EBITDA showed substantial improvement, narrowing from -90 million NOK to -37 million NOK. Similarly, net losses contracted from -115 million NOK to -85 million NOK. These efficiency gains, however, failed to offset deeper structural issues becoming apparent in the company’s order pipeline.
Collapsing Order Pipeline Raises Alarm
Perhaps the most troubling aspect of Nel’s quarterly update was the dramatic deterioration in new business. Order intake collapsed to just 57 million NOK, representing a staggering 64% decline. Even more alarming, the company’s order backlog shriveled to 984 million NOK, marking a 47% year-over-year contraction.
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These figures paint a sobering portrait of industry conditions, where major projects remain stuck in planning phases and final investment decisions face repeated delays or outright cancellation. The numbers suggest that despite political support for hydrogen technology, commercial adoption continues to lag far behind expectations.
Industry-Wide Headwinds Intensify
Recent assessments from Germany’s Federal Audit Office have confirmed what sector specialists have long suspected: the hydrogen rollout is failing to meet projected timelines. Nel’s struggles reflect broader industry challenges, with hesitant investors and policy uncertainties creating significant headwinds across the sector.
Market analysts at Kepler Cheuvreux responded to the quarterly data by maintaining their “Reduce” recommendation, though they did adjust their price target accordingly. Research specialists remain doubtful that market conditions will improve meaningfully in the near term.
Looking ahead, Nel aims to introduce new electrolyzer technology by 2026, targeting cost reductions that could improve competitiveness. However, without genuine demand growth, even superior technological solutions may struggle to gain market traction. The company’s next quarterly results will prove crucial in determining whether the current downward trajectory can be arrested or if the decline will continue to accelerate.
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