Nel ASA's Submarine Backlog Is Real, but the Cash Is Years Away

Nel ASA added about USD 20 million in Collins Aerospace orders, but delivery slips to 2027-2028 as SB1 Markets cuts its target to NOK 0.30.

Nel ASA has spent the past week adding roughly USD 20 million of Collins Aerospace business to its order book, yet the Norwegian hydrogen group's balance sheet will not feel any of it for years. The PEM electrolyser stacks destined for submarine life-support systems are booked as intake in the third quarter of 2026, while physical delivery is not scheduled until 2027 and 2028 — a gap that leaves the near-term cash position untouched.

That timing mismatch sits at the heart of the current debate around the stock. The orders themselves are substantial and technically demanding: the equipment must generate oxygen aboard submarines, a niche where reliability standards are unforgiving. Beyond the US Navy, programmes run by the British and French naval forces also draw on these systems, tying Nel into procurement cycles across several Western fleets.

How the USD 20 Million Breaks Down

The total is assembled from several tranches rather than a single award. The largest single call-off came from Collins Aerospace for US Navy submarines and accounted for about USD 12 million. Orders tied to American, British and French programmes added roughly USD 7 million, with smaller earlier drawdowns completing the figure.

For shareholders, the structure matters more than the headline number. The contracts bolster the backlog, but settlement follows a multi-year timetable, meaning no revenue lands in the current fiscal year. Between order intake and component shipment lies a considerable stretch of time.

SB1 Markets Sees No Clear Route to Profit

Scepticism on the fundamentals has not eased. On 29 September, SB1 Markets cut its price target on Nel ASA from NOK 0.50 to NOK 0.30 while reaffirming a sell rating. Analyst Andreas Skeisvoll Grimsmo pointed to a missing path to profitability and an industry labouring under massive overcapacity. In a field defined by intense competition, Nel holds only around 5 percent market share, he noted.

Against that backdrop, the recent intake offers limited near-term relief. Grimsmo has also raised the prospect of a fresh capital raise in 2028, putting the risk of future dilution squarely on the radar for investors. Because the submarine revenue sits so far in the future, the company's financial runway remains a central question.

What the Upcoming Report Must Show

Concrete evidence on cash burn is due shortly. Nel's financial calendar has the third-quarter report on the agenda, and market participants will be watching how much other business units contributed to the period. Attention is likely to focus on general order intake outside the maritime special projects, and on how sturdy the financial cushion looks before deliveries begin.

The stock has taken a muted view of the news. The shares closed yesterday at EUR 0.1906, a level 48 percent below their 52-week high. An earlier reading during the session put the price at EUR 0.1896, down 0.5 percent on the day and 9.5 percent above the 52-week low.