The Norwegian hydrogen specialist Nel ASA is navigating a period of stark contrasts. While its first-quarter results reveal a shrinking order book and a reduced workforce, the company is simultaneously doubling down on a technology pivot that has already secured a fresh US contract. Investors appear cautiously optimistic, pushing the stock up 2.48 percent to EUR 0.21 on Thursday, a move that adds to a 30-day gain of more than eight percent.
A Leaner Operation
Nel’s management has taken an axe to costs. The company confirmed on April 23 that it slashed its headcount by 19 percent year-on-year. This aggressive belt-tightening is starting to show up in the financials. Although customer revenues dipped to NOK 148 million in the first quarter — a five percent decline — the operating result (EBITDA) improved to negative NOK 100 million. The narrowing loss reflects better margins and more efficient project execution, as Nel walks away from unprofitable contracts in favor of higher-quality business.
The company’s liquidity buffer remains solid at roughly NOK 1.44 billion, providing a financial cushion for the ongoing restructuring. That war chest, while slightly thinner than at the start of the year, is sufficient to fund the strategic overhaul at its Herøya facility.
PEM Takes Center Stage
Nel’s technological pivot is becoming increasingly clear. Proton Exchange Membrane (PEM) electrolyzers now account for 78 percent of new orders booked in the first quarter. The standout deal came after the quarter closed: a USD 7 million order from Douglas County Public Utility District in Washington state. The US energy utility will use containerized PEM electrolyzers to convert surplus hydropower into green hydrogen, helping stabilize the local grid. Nel will manufacture the systems at its Connecticut plant, with commissioning slated for the first half of 2027.
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The shift toward standardized, containerized solutions is a deliberate strategy to cut material costs and speed up delivery times. However, this transition is leaving its mark on the order backlog, which fell 24 percent to NOK 1.11 billion by the end of March.
A Tale of Two Segments
The two business lines are moving in opposite directions. While the PEM division lost volume, the alkaline electrolyzer segment posted a slight uptick in revenue. Management remains upbeat about the pipeline, pointing to several industrial projects in the 50 to 150 megawatt range that are approaching final investment decisions. Europe continues to be the most active market for these large-scale developments, though North America and Asia are gaining momentum.
To prepare for this demand, Nel is already testing a scaled-down version of its next-generation electrolyzer at its US facility. The company is also gearing up for a major product launch on May 6, when it will unveil a new pressurized alkaline platform. Backed by a three-digit million euro grant from the EU, the technology promises to slash space requirements and nearly halve costs.
What Lies Ahead
The market’s reaction suggests investors are willing to look past the near-term backlog shrinkage and focus on the strategic direction. The stock has gained more than eight percent year-to-date, though volatility remains elevated at an annualized 60 percent. The real test will come on July 15, when Nel publishes its half-year report. By then, concrete delivery numbers will show whether the new technology and recent orders can kickstart a genuine recovery. For now, the company is betting that a leaner, more focused operation combined with a clear technological edge will carry it through the turbulence.
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