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Investing.com -- Shares of Norwegian hydrogen company NEL ASA (OL:NEL) fell more than 4% on Wednesday following the release of its first-half 2025 earnings, which showed sharp year-over-year declines in key financial metrics and a rise in at-risk orders.
Revenue for the first half came in at NOK390 million, down 36% from NOK608 million a year earlier. The figure was broadly in line with consensus estimates of NOK395 million.
The decline was driven mainly by reduced sales in the alkaline electrolyzer segment, while the PEM segment remained relatively stable due to a steadier order backlog.
NEL reported an EBITDA loss of NOK201 million for the period, compared to a loss of NOK48 million in 1H24.
The deterioration reflects weaker revenues, reduced operating leverage, and the absence of a NOK54 million one-off gain recorded in the previous year from the renegotiation of a supply agreement with Nikola (OTC:NKLAQ). Net income came in at -NOK310 million, versus -NOK79 million a year earlier.
For the second quarter, revenue dropped 35% year over year to NOK215 million. The company posted an EBITDA loss of NOK86 million in the quarter, compared with a NOK79 million loss in the same period last year. Net income for the second quarter of the fiscal year 2025 widened to a loss of NOK 131 million, up from a loss of NOK 118 million in the year ago quarter.
Morgan Stanley (NYSE:MS) noted that “1H25 results are broadly in-line with consensus expectations” and added that the figures “suggest that consensus expectations are broadly in the right place for FY2025, with expectations of a significant YoY EBITDA decline to -NOK370/400mn.”
The outlook on orders and new business remains uncertain. NEL reported that NOK200 million in orders are now at risk of delay or cancellation, a sharp rise from NOK29 million previously.
The company attributed the increase mainly to the recent cancellation of a Statkraft contract.
Morgan Stanley flagged this as a development, writing that “no meaningful change in message regarding new orders & broader group outlook” was seen, signaling a lack of new momentum.
Cash on hand stood at NOK1.93 billion at the end of the period, a 13% decrease from NOK2.23 billion a year earlier.
Despite industry headwinds, NEL reiterated its focus on execution and financial turnaround.
The company said it expects several projects in the 200 MW range to potentially reach final investment decisions in the coming quarters.
It also noted that improved regulatory clarity in the United States, including the 45V hydrogen production tax credit now secured through January 1, 2028, could help stimulate demand for green hydrogen projects.