Norwegian pure-play hydrogen technology company Nel ASA (OSE:NEL) on Thursday posted a 12% year-on-year rise in second-quarter (Q2) revenues and announced a decision to double the alkaline electrolyser stack production capacity of its Heroya factory to around 1 GW.
The company’s investment decision for a second production line at Heroya follows its announcement from a few weeks back in relation to an order it received in the US for the supply of 200 MW of alkaline electrolyser stacks. Nel said at the time that this is the company’s largest order ever.
“The recent 200 MW contract will not be a one-off, and as we see a potential for additional large orders in the foreseeable future, we have decided to expand our production capacity,” chief executive Hakon Volldal said in a statement today.
The fully-automated factory in Heroya was opened in April 2022 and currently has a production capacity of 500 MW. Nel says that it is expandable to 2 GW. Adding a new production line there would cost about EUR 35 million (USD 35.9m) and is expected to happen by April 2024.
While reporting the company’s Q2 financial results on Thursday, CEO Volldal reflected on this record-size order: “In addition to having significant positive impact on Nel as a company, it also shows that the green hydrogen market is developing in the right direction. Political support and real incentives are emerging, equipment capex is coming down, long-term green power purchase agreements and off-take agreements are achievable, and financial institutions have matured their thinking on how to finance green hydrogen projects. These are all key requirements for realising more large-scale projects,” he commented.
As per Nel’s Q2 performance, it said its top line climbed to NOK 183 million (USD 18.9m/EUR 18.5m) on the year as the company continues to increase electrolyser system deliveries according to plan. However, its loss before interest, tax, depreciation and amortisation deepened to NOK 197 million.
Nel noted that the continued ramp-up of the business in a drive to pursue growth is negatively affecting profitability. At the same time, supply chain challenges have led to a rise in raw materials expenses and somewhat delayed deliveries.
More details are available in the table below.
| Figures in NOK |
Q2 2022 |
Q2 2021 |
| Revenue and operating income |
183m |
164m |
| Operating expenses |
424m |
313m |
| EBITDA (loss) |
(197m) |
(120m) |
| Operating profit (loss) |
(241m) |
(149m) |
| Net income (loss) |
(275m) |
(312m) |
Nel’s second-quarter order intake jumped to NOK 236 million from NOK 147 million a year earlier. Moreover, at the end of June, Nel had its highest ever order backlog of NOK 1.44 billion, up 33% on the year.
Post-quarter, subsidiary Nel Hydrogen A/S won an EUR-8-million purchase order from an undisclosed European client for the delivery of several H2Station units for light- and heavy-duty fuel cell electric vehicles (EVs). Deliveries under this contract are planned for early next year.
(EUR 1 = USD 1.025)
(NOK 1 = USD 0.103/EUR 0.101)
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Nel's electrolyser production facility in Heroya, Norway. Source: Nel ASA.
