July 18, 2023
By Leigh Collins

Hydrogen electrolyser maker Nel reports record quarterly revenues, but still makes a $34m loss in Q2

Norwegian manufacturer sees year-on-year income growth of 159% as orders increase by 81%

Norwegian electrolyser maker Nel has reported its highest ever quarterly revenues of NKr475m ($47.3m) in the second quarter of 2023 — an increase of 159% year-on-year, but nevertheless registered a net loss of NKr342m ($34m) in Q2.

All segments — fueling, alkaline electrolysers and PEM electrolysers — “experienced strong growth compared to the same quarter last year”, the company stated in a press release.

Order intake for the quarter hit NKr428m, up 81% compared to the same period last year (NKr236m), while Nel’s order backlog also grew to NKr2.96bn, a 106% increase year-on-year.

“The electrolyser division reported a significant 202% increase in revenue compared to the same quarter last year, which was one of the first quarters of deliveries from [Nel’s new factory in] Herøya [southern Norway],” the company stated.

“As volumes have increased, alkaline revenues have shown a substantial growth of 383% from the same period last year, while PEM was up 78% for the same period.”

Håkon Volldal, CEO of Nel, who officially joined the company on 1 July 2022, added: “We continue to see positive developments due to increased production volumes and revenues from contracts with significantly improved terms.”

However, earnings before interest, tax, depreciation and amortization (Ebitda) amounted to a loss of NKr138m for Q2, which the company blames on “high losses in Fueling, low margins on electrolyser projects signed in 2020/21 and increased personnel expenses to prepare for large-scale project execution”.

The wider net loss of NKr342m is “mainly related to loss from operations and a net negative unrealized fair value adjustment from shareholdings of minus NKr198m” — in other words, an on-paper loss from investments.

Nevertheless, the Norwegian company still retains a cash balance of NKr4.12bn, up 13% on Q2 2022 (NKr3.65bn).

“Electrolyser projects are becoming increasingly larger and order intake is therefore expected to vary between quarters,” said Nel. “However, overall demand is growing, and customers are increasingly looking towards suppliers with available capacity and a track record for delivering reliable, high-quality equipment.”

Volldal added: “Our pipeline, consisting of increasingly larger projects, continues to mature. With size comes complexity, which we are confident will play out favourably for Nel as the need for competence and experience increases accordingly.”

Nel announced in Q2 that it planned to build a new PEM and alkaline electrolyser gigafactory in Michigan that would eventually reach a production capacity of 4GW, although no final investment decision has been made.(Copyright)