Nel ASA Sees Stable Underlying Earnings as Legal Settlement Masks Q2 Loss

Nel ASA reports Q2 net loss of 189M kroner due to 70M legal payout, but new orders jump 224% and new PA-Series alkaline tech targets 60% cost reduction.

A one-off legal payout of 70 million Norwegian kroner buried an otherwise stable operating performance at Nel ASA during the second quarter, muddying the picture of a company that simultaneously posted a surge in new orders and unveiled a cost-cutting technology platform.

The Norwegian electrolyser manufacturer reported a net loss of 189 million kroner for the three months ended June 30, widening from a loss of 131 million kroner in the same period last year. The headline EBITDA swung to minus 155 million kroner, compared with minus 86 million a year earlier. But management was quick to point out that the comparator with Iwatani Corporation of America and Cavendish Hydrogen — resolved in June over technical issues at hydrogen refuelling stations in California — was a distortion. Strip that 70-million-kroner payment out, and the adjusted EBITDA landed almost exactly where it did in the prior-year quarter.

Revenue from customer contracts fell 12% year-on-year to 153 million kroner, while total revenue dropped to 182 million kroner from 215 million. The decline reflects a broader slowdown in hydrogen project investment globally, though Nel's order intake tells a very different story.

Orders surge as PEM business reawakens

New orders for the quarter reached 230 million kroner, a 224% leap from the same period in 2025. The catalyst was the PEM (proton exchange membrane) division, which contributed roughly 96% of the total — or 222 million kroner — representing a 280% jump. Alkali orders, by contrast, slumped 36% to just 8 million kroner. The overall order backlog climbed 9% from the first quarter to 1.213 billion kroner, a level only 3% below the prior-year mark.

That divergence between the two segments also played out in their operating results. PEM revenue rose sequentially from 74 million to 97 million kroner, though still 10% below last year's figure, while the division's EBITDA narrowed from minus 47 million to minus 35 million kroner, helped by better project execution and higher product margins. The Alkali business, however, saw revenue fall 14% to 56 million kroner and its EBITDA stuck at roughly minus 28 million kroner.

New alkali platform targets 60% cost reduction

During the quarter Nel launched its next-generation pressurised alkaline technology, dubbed the PA-Series, on May 6 alongside key partners and customers. The company claims the system can cut production costs by up to 60% compared with older atmospheric designs — a promise that will determine whether the order drought in the alkaline segment reverses. Management cautioned that profitability in the alkali business requires annual volumes in the hundreds of megawatts, while PEM needs capacity utilisation of 20-24%.

The company is scaling up manufacturing in parallel, aiming for 500 megawatts of production capacity by the end of 2026 and 1 gigawatt in 2027. The European Union has committed 135 million euros in support for the PA-Series line.

Cash cushion buys time — and a leadership handover

Nel ended June with cash and equivalents of 1.328 billion kroner, down from 1.928 billion a year earlier but still sufficient, according to management, to fund operations and technology development without an immediate need for fresh capital.

The numbers land in the middle of a leadership transition. CEO Håkon Volldal announced his resignation in June to take a role outside the hydrogen industry, and the board is searching for a successor. Volldal will remain at the helm during a six-month notice period, with the company insisting the strategic focus on electrolyser technology will not change.

At the market, the stock trades at €0.20, nearly flat on the day, but some 45% below its 52-week high of €0.37 reached in late May. The 14-day relative strength index of 33-34 points to oversold territory, and the share price sits slightly below its 200-day moving average of €0.22. Year-to-date the stock is still up roughly 4%, though the monthly decline of over 16% tells a more cautious near-term story.

Whether the order momentum — led by PEM — translates into revenue growth in the current quarter will depend on how quickly those contracts convert to recognised sales. The alkaline pipeline, meanwhile, remains the acid test for Nel's technology bet.