Nel ASA Outsources European Electrolyser Assembly to Hydrasun as Cash Burn and CEO Vacancy Test Investor Patience

Nel hands European PEM electrolyser assembly to Hydrasun while Q2 cash fell to 1,328M NOK and net loss widened to 189M NOK.

Nel ASA has handed the assembly of its PEM electrolyser systems for the European market to Scottish energy services firm Hydrasun, a framework agreement struck roughly two weeks ago that reshapes the Norwegian company's manufacturing footprint without requiring it to build new plants from the ground up. The stock has slipped 1.3 percent since the deal was announced.

Under the arrangement, Nel keeps producing the PEM stacks at its own facility in Wallingford, Connecticut, while Hydrasun takes on procurement, fabrication and integration of the balance-of-plant on European soil. The company describes the move as an expansion of Hydrasun's existing manufacturing role rather than an acquisition, a structure designed to serve European customers while sidestepping the cost of standing up fresh assembly capacity.

A Leadership Handover in the Middle of a Turnaround

The manufacturing shift lands during a delicate period for the hydrogen specialist. Chief executive Håkon Volldal announced more than a month ago that he intends to leave for a different professional challenge, working out a six-month notice period while continuing to run the business as the board hunts for a successor. Arvid Moss, who chairs the supervisory board, signalled his own confidence on 24 April by buying 100,000 shares at an average price of 2.2547 NOK.

Whether a new chief executive is named promptly could determine how quickly Nel commits to its strategic course. A drawn-out search risks leaving the company in limbo just as it needs to press ahead with cost reductions and commercial rollouts.

The Cash Question That Overshadows Everything

For all the strategic repositioning, the numbers that matter most to investors concern how fast Nel burns through its reserves relative to the orders it brings in. At the close of the second quarter, the company held 1,328 million NOK in cash, down sharply from 1,928 million NOK a year earlier. The order book stood at 1,213 million NOK, while order intake for the quarter reached 230 million NOK — a jump of 224 percent year on year.

Revenue including other income fell to 182 million NOK from 215 million NOK in the prior-year period, and contract revenue from customers dropped 12 percent to 153 million NOK. The net loss widened to 189 million NOK from 131 million NOK, dragged down further by a 70 million NOK hit from a legal settlement with Iwatani. EBITDA came in at minus 155 million NOK, compared with minus 86 million NOK a year earlier — a gap that lays bare how exposed the balance sheet is when demand softens.

The pressure is straightforward: management must demonstrate it can stabilise the cash drain without resorting to fresh capital measures. That hinges on how efficiently the backlog can be converted into revenue.

PEM Carries the Load as Alkaline Lags

The PEM division was the standout performer in the second quarter, accounting for 96 percent of total order intake. Its backlog grew by 147 million NOK to 990 million NOK, and revenue from PEM electrolysers climbed 31 percent from the previous quarter to 97 million NOK, powered by smaller units destined for industrial applications. The segment's operating result before interest, taxes and depreciation improved by 12 million NOK to minus 35 million NOK on better product margins.

The alkaline business tells a different story. Revenue there declined 14 percent in the second quarter, and the segment's revival may depend on a platform for pressurised alkaline electrolysers that Nel brought to market on 6 May with customers and partners. Should ongoing prototype testing translate into larger follow-on orders, it could breathe new life into that side of the business.

Chart Levels and the October Print

Technically, the shares are trading at 0.1922 EUR, well above the 52-week low of 0.1731 EUR — a floor that, if held, limits further downside. A failure to distance itself from that level would put the yearly trough back in play. To the upside, the 52-week high of 0.3655 EUR caps longer-term recovery prospects; Friday's close of 0.1940 EUR leaves the stock 47 percent below that peak.

The next fundamental checkpoint is the third-quarter 2026 report, expected on 15 October 2026. Investors will scrutinise two things above all: the pace of cash consumption and evidence of progress on large orders for the new-generation alkaline electrolysers. A timely CEO appointment would give the market the strategic bearings it currently lacks.