Nel ASA Faces Severe Headwinds as Order Intake Plummets

The hydrogen sector specialist Nel ASA is confronting substantial operational challenges, with recent quarterly results revealing significant deterioration across key performance metrics. The company’s latest financial disclosures paint a concerning picture for the electrolyzer manufacturer’s near-term prospects.

Financial Performance Shows Marked Decline

During the second quarter of 2025, Nel ASA reported revenues of just 174 million Norwegian Kronen, representing a stark 48 percent decline compared to the same period last year. The company’s operational losses widened slightly, with EBITDA standing at negative 86 million NOK. These figures underscore the substantial operational headwinds the company currently faces, highlighting the gap between the renewable energy sector’s long-term potential and immediate implementation challenges.

Order Collapse Reaches Critical Levels

The most alarming development emerges from the company’s order pipeline. New order intake collapsed by 74 percent year-over-year to a mere 71 million Norwegian Kronen. The order backlog, a crucial indicator of future revenue potential, contracted significantly by 40 percent to 1,249 million Kronen.

This downturn was particularly severe within the alkaline electrolyzer segment, where orders plummeted by 94 percent. While the PEM segment demonstrated relative stability, it proved insufficient to counterbalance the overwhelming decline across the business. This pattern suggests deep-seated market uncertainty and hesitation among potential clients.

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

Industry-Wide Pressures Intensify

Nel ASA’s struggles occur against a backdrop of sector-wide difficulties. The entire hydrogen industry is experiencing protracted delays in final investment decisions for major projects. This widespread investment caution represents a primary driver behind the deteriorating order figures.

The company suffered an additional setback with energy firm Statkraft canceling a significant 40-megawatt electrolyzer contract. Market conditions currently present little room for optimistic interpretation, as demonstrated by these key metrics:

• Q2 2025 Revenue: 48% year-over-year decrease
• Q2 2025 Order Intake: 74% year-over-year decline
• Order Backlog: 40% year-over-year reduction
• Q2 2025 EBITDA: Negative 86 million NOK

Despite these challenging conditions, a recent order from H2 Energy in early October provided a minor positive development. However, this single contract does little to alter the prevailing negative trajectory. The company’s performance continues to reflect a clear downward trend, with recovery prospects remaining uncertain amid current market dynamics.