Hydrogen Specialist Nel ASA Reports Conflicting Quarterly Signals

Nel ASA’s latest quarterly results paint a complex picture of the hydrogen technology company’s current trajectory. The Norwegian firm demonstrated significant operational improvements that surpassed market expectations, yet concerning declines in revenue and new orders created investor uncertainty.

Financial Performance Shows Divergent Trends

The third quarter brought a sharp 17% contraction in customer project revenue, which fell to 303 million Norwegian kroner. More alarmingly, new order intake deteriorated dramatically, plummeting 64% to just 57 million kroner. This substantial drop caused the company’s order backlog to shrink by 47%, settling at 984 million kroner.

Despite these challenging top-line figures, Nel made impressive strides toward profitability. The company’s EBITDA loss nearly halved, improving from 90 million to 37 million kroner. The net loss also showed substantial improvement, narrowing from 115 million to 85 million kroner – results that exceeded analyst projections.

Operational Efficiency Amid Market Challenges

These financial improvements highlight Nel’s successful cost containment measures, though they cannot fully offset concerns about weak market conditions. Chief Executive Håkon Volldal acknowledged the “challenging macro-environment” while emphasizing the company’s progress in maintaining efficiency and preserving liquidity.

Should investors sell immediately? Or is it worth buying Nel ASA?

The company maintains a strong financial foundation with approximately 1.8 billion kroner in available liquidity. For 2025, Nel has outlined capital expenditure plans that are projected to run approximately 50% below previous year levels.

Future Prospects and Innovation Pipeline

A potential bright spot emerges from Nel’s project pipeline, where the company is currently conducting over 500 MW of paid FEED studies (Front-End Engineering Design). These include major initiatives across both Northern and Southern Europe that could potentially convert into firm orders, though the timing and certainty of such conversions remain unclear.

Technological advancement forms another pillar of Nel’s strategy. The company is developing a new pressure-based alkaline platform scheduled for market launch in the first half of 2026. This innovation aims to substantially reduce both project costs and energy consumption, potentially strengthening Nel’s competitive positioning.

The critical test for Nel’s future growth will be its ability to transform its substantial FEED study portfolio into concrete, revenue-generating contracts.