Nel ASA Navigates a Year of Strategic Losses and Record Orders

Investors in Norwegian hydrogen specialist Nel ASA are presented with a stark dichotomy. The company recently reported its largest annual loss to date for 2025, yet simultaneously announced a surge in new orders to near-record levels. This apparent contradiction defines a pivotal year of strategic transition for the firm.

A Strategic Clean-Up Drives Record Losses

The financial results for 2025 reveal significant pressures. Annual revenues contracted by approximately 31% to 963 million Norwegian Kroner (NOK). Company leadership attributes this decline primarily to irregular delivery schedules for major electrolyzer projects, which are heavily dependent on customer-side construction progress.

The situation on the bottom line was more severe. A net loss of 870 million NOK in the fourth quarter propelled the full-year deficit to 1.27 billion NOK. Crucially, this substantial loss was not chiefly a result of day-to-day operations but a deliberate strategic decision. The company recorded impairments totaling 799 million NOK to divest from outdated technologies and streamline its balance sheet.

Counterweight: An Order Book at Historic Levels

Contrasting this radical clean-up is exceptionally strong demand. Order intake skyrocketed by 364% in the final quarter to reach 686 million NOK. This represents the second-best quarterly performance in the company’s history and expanded the total order backlog to over 1.3 billion NOK.

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

This momentum was almost exclusively driven by the PEM division, which secured 93% of the new orders. Key contract wins included the HyFuel and Kaupanes hydrogen projects, with a combined value exceeding 50 million US dollars. This upswing is bolstered by a strategic alliance with Samsung Engineering & Construction. The Korean partner, holding just over nine percent of Nel’s shares since early 2025, provides strengthened capital and improved access to major global projects.

Securing Future Profitability Through Next-Gen Tech

To convert future orders into profitable revenue, Nel is making substantial investments in new production capabilities. In late 2025, the board approved the industrialization of its next-generation electrolyzer at the Herøya facility. The first phase of expansion to one gigawatt of capacity carries a price tag of around 300 million NOK, with the majority of funding provided by the EU Innovation Fund. This new technology is designed to reduce physical footprint requirements by 80% and significantly lower customer investment costs.

Despite the heavy reported losses, financing for this transition appears secure for now. The company closed the year with solid liquidity reserves of 1.6 billion NOK.

The aggressive balance sheet restructuring and focus on more efficient technology demonstrate management’s proactive approach to industry-wide challenges like high production costs. The critical task ahead is to efficiently and profitably translate the robust order backlog into tangible revenue. Initial indications of operational progress in the new year will come with the release of first-quarter figures on April 22. Prior to that, the annual general meeting is scheduled for April 10.