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Nel ASA (OSE:NEL) reported a significant revenue decline in its first quarter of 2025, while simultaneously achieving record order intake in its PEM division, according to the company’s Q1 2025 results presentation delivered on April 30, 2025.
Quarterly Performance Highlights
Nel reported revenue of NOK 155 million for Q1 2025, representing a 44% decrease from NOK 276 million in the same quarter last year. The company posted an EBITDA loss of NOK 115 million, a substantial deterioration from the positive EBITDA of NOK 32 million in Q1 2024.
As shown in the following quarterly highlights, Nel maintained a solid cash position of NOK 2,059 million while securing new orders across various sectors:
The company’s financial performance showed mixed results across divisions. The Alkaline segment experienced a steep 69% year-over-year revenue decline, while the PEM segment demonstrated strong growth with a 64% revenue increase compared to Q1 2024, primarily driven by containerized deliveries.
The detailed financial breakdown reveals the extent of the challenges facing Nel, particularly in its Alkaline business:
Contrasting Segment Performance
Nel’s quarter was characterized by sharply divergent performance between its two main business segments. The Alkaline division reported revenue of NOK 70 million, down 69% year-over-year, with an EBITDA loss of NOK 52 million. The company attributed this decline to "a lower activity level" and noted that Q1 2025 results included NOK 23 million in net research and development expenses.
In contrast, the PEM division showed promising growth with revenue reaching NOK 85 million, a 64% increase from Q1 2024. The division’s EBITDA loss narrowed to NOK 31 million, an improvement of NOK 12 million compared to the same quarter last year. Nel highlighted that "product and project margins are in general higher compared to previous quarters due to more favorable terms and conditions and better execution."
Order Intake and Backlog
Despite overall revenue challenges, Nel’s order intake showed resilience at NOK 311 million, though still representing a 22% year-over-year decline. The company’s total order backlog stood at NOK 1,460 million, down 31% from Q1 2024.
The following chart illustrates the stark contrast between Nel’s Alkaline and PEM divisions in terms of order intake and backlog:
Particularly noteworthy was the record performance of the PEM division, which achieved its highest-ever quarterly order intake of NOK 290 million, representing a 127% increase year-over-year. This growth was driven by strong demand for Nel’s containerized PEM solutions.
As shown in the following chart, PEM order intake has been steadily increasing over recent quarters, culminating in the Q1 2025 record:
Strategic Partnerships and Initiatives
A significant development during the quarter was Nel’s collaboration agreement with Samsung Engineering (KS:028050) & Construction (Samsung (KS:005930) E&A), allowing Samsung to offer complete hydrogen plants using Nel’s electrolysers. In a separate transaction, Nel raised NOK 353 million through a private placement with Samsung E&A, making the Korean company Nel’s largest shareholder with a 9.1% stake.
The following image shows the signing of this strategic partnership:
Nel has positioned itself as a preferred partner for several global industry leaders, including General Motors (NYSE:GM), Reliance, and SAIPEM, in addition to Samsung E&A. The company highlighted its extensive ecosystem of partners as a key strategic advantage:
Technology Development
Nel continues to advance its technology portfolio, with particular focus on its pressurized alkaline (PE) electrolyser development. The company reported that prototype development is progressing according to plan with promising results, including breaking ground at the Herøya test site and beginning stack assembly.
The following image shows the progress on Nel’s pressurized alkaline technology:
In a significant milestone, Norwegian Hydrogen announced on March 31, 2025, that it had taken Final Investment Decision (FID) for its Rjukan project, where Nel has been selected to deliver a 25 MW Pressurized Alkaline pilot. The facility is projected to be completed by the end of 2027.
Cost Reduction Measures
In response to financial challenges, Nel implemented cost reduction and capacity adjustment measures during Q1 2025, including a temporary halt of operations at its Herøya facility. The company stated that these measures "will reduce the cost base gradually over the first half of 2025."
Nel’s employee count has decreased to 394, reflecting the company’s efforts to optimize its operations amid challenging market conditions.
Market Outlook
Nel maintains a positive outlook on market development, noting that EU, US, Japan, and Korea are projected to represent approximately 30% of global hydrogen demand by 2030, driven by supportive policy frameworks. The company expects applications such as refining, ammonia, and methanol production to make up around 75% of demand.
Looking ahead, Nel anticipates that order intake will be higher in 2025 than in 2024, with "the quality of the projects also generally higher given more rigid and demanding qualification processes and FID requirements." The company highlighted that several of its target projects in the 20-200 MW range are expected to take FID in the coming quarters.
For large-scale systems, Nel expects that "more clarity around EU and US regulations in combination with national hydrogen auctions will help demand," while noting continued healthy demand for its containerized PEM solutions.
Full presentation:
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