Nel ASA: A 16% Surge Masks the Depth of the Order Book Challenge

The Norwegian hydrogen specialist closed the week with a bang, its shares leaping 16 percent to EUR 0.28 — a fresh 52-week high. Yet beneath the surface of that rally lies a first quarter that sent decidedly mixed signals to the market.

Revenue slipped to 148 million Norwegian kroner in the three months through March. More starkly, order intake collapsed by 73 percent year-on-year, leaving the total order backlog at 1.1 billion kroner — a 24 percent decline. Management did manage to narrow the operating loss to 100 million kroner, an improvement of 15 million from the prior year, while the net loss shrank from 179 million to 144 million kroner.

The company’s balance sheet offers a cushion. Cash reserves stood at roughly 1.4 billion kroner at the end of the first quarter, which Nel says is sufficient to fund operations through the end of 2026.

Two US Orders, One Week

Two separate contracts, each valued at approximately USD 7 million, landed in Nel’s PEM division within days of each other — providing a rare bright spot.

The first came from Mesure Process, a subsidiary of Synqo Energies, marking the customer’s second order from Nel. The containerised units are destined for a European project that will supply hydrogen refuelling stations and industrial clients.

The second order originates from the Douglas County Public Utility District in Washington State. An electrolyser will use surplus energy from a hydroelectric plant to stabilise the grid, reducing wear on the turbines and lowering maintenance costs. The equipment is scheduled to enter service in the first half of 2027.

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

Insider Confidence

Board chair Arvid Moss put his own money on the line, purchasing 100,000 shares in the company. Market participants often interpret such insider transactions as a signal of confidence ahead of significant milestones.

The timing is notable: Nel is days away from unveiling a new pressurised alkaline electrolyser platform on May 6 — a product the company describes as a technological leap for the sector. The system, developed over eight years, is designed to cut capital expenditure by 40 to 60 percent and operating costs by 10 to 20 percent. The European Union is backing the scaling effort with up to EUR 135 million, covering roughly 60 percent of eligible costs.

Nel says it is in close dialogue with potential buyers and will begin deploying the new technology in its sales operations from next week. Larger deliveries are not expected until 2027.

The Herøya Question

The company’s facility in Herøya is slated to reach an annual production capacity of four gigawatts over the long term. But a cloud hangs over the same site: Nel is currently reviewing the book value of two idled 500-megawatt production lines for atmospheric alkaline systems. Whether those lines will be reactivated, closed or sold remains undecided. An impairment charge is possible — and would add to the 799 million kroner in writedowns already taken in the 2025 financial year.

Analysts Keep Their Distance

Despite the share price rally — up more than 43 percent since the start of the year — professional analysts remain cautious. Berenberg maintained its neutral rating but trimmed its price target from 2.60 to 2.30 kroner. Citigroup followed suit, cutting its target from 2.70 to 2.40 kroner, both citing valuation risks even as sentiment improves.

The next major checkpoint arrives on July 15, when Nel reports second-quarter results. By then, the market will have had two months to assess whether the May 6 product launch translates into tangible orders — and whether the order intake can finally reverse its downward trajectory.