Nel ASA's Order Collapse Overshadows Narrowed Losses

A dramatic plunge in new orders has jolted Nel ASA, sending its shares tumbling and casting a shadow over the Norwegian hydrogen specialist's progress in reducing losses. The company's first-quarter figures for 2026 reveal a stark disconnect between improving operational discipline and a near-paralysis in demand.

Investors reacted swiftly to the disappointing news. On Wednesday, the stock plummeted by approximately eleven percent to 0.20 euros, erasing a significant portion of its recent gains and leaving it with a year-to-date increase of just seven percent. The sell-off brings the share price perilously close to its March 52-week low.

The core issue is a precipitous drop in new business. Order intake for the quarter collapsed by 72.8 percent to just 85 million Norwegian kroner (NOK), down from 312 million NOK a year earlier. Consequently, the total order backlog has shrunk by nearly a quarter, standing at approximately 1.1 billion NOK by the end of March.

This order drought occurred despite a slight improvement in the company's financial performance. Revenue saw a modest decline to 148 million NOK, missing analyst expectations. However, stringent cost management yielded results: the operating loss (EBITDA) narrowed to 100 million NOK, and the net loss was reduced to 144 million NOK.

Management points to a challenging macroeconomic environment to explain the slowdown. High interest rates and elevated costs are pressuring the global green hydrogen industry. Furthermore, delays in government subsidy programs are forcing customers to postpone final investment decisions on major projects.

Internally, the company's performance was mixed. The Alkali electrolyser business grew slightly and contributed positively at the operational level. In contrast, the Proton Exchange Membrane (PEM) division recorded lower revenues and remained unprofitable. Financially, liquidity remains a focus, with cash reserves reported between 1.4 and 1.6 billion NOK.

In response to market conditions, Nel is pivoting its strategy. The focus is shifting towards smaller-scale projects in the 50 to 150 megawatt range, emphasizing standardized, containerized PEM systems. This modular approach requires lower upfront investment and allows for faster deployment, a model reportedly gaining traction in Europe, North America, Asia, and the Middle East.

The coming weeks are critical for the company's near-term prospects. On May 6, Nel is set to unveil a new pressurized Alkali platform. Simultaneously, final investment decisions for several large-scale projects across Europe, Asia, and North America are pending. The company's immediate challenge is to convert these potential megawatt-scale projects into firm orders to replenish its dwindling backlog. Until then, management emphasizes maintaining strict financial discipline to navigate the demand weakness.

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