Nordex SE (ETR:NDX1) said on Friday it is entering the green hydrogen market to complement its core business against the background of a cautious outlook for 2023 that does not exclude an operating loss.
The German wind turbine manufacturer has agreed two strategic joint ventures that will enable it to step into the manufacturing of electrolysers and the development of large green hydrogen projects with a focus on Latin America and the US.
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Nordex H2 S.L, a joint venture with Spain's Acciona, has been formed to develop large-scale projects with the aim to produce 500,000 tonnes of green hydrogen annually within the next ten years. The first schemes are expected to reach the shovel-ready state by 2027.
The assets, each powered by at least 1 GW of renewable energy, will be located in areas with onshore wind capacity that will not be connected to the power grids and where green hydrogen can be produced at competitive prices. Nordex noted that it has already built a pipeline of green hydrogen projects in the two focus areas.
Acciona owns 50% of the venture which it acquired from Nordex for EUR 68 million (USD 74.02m). The fresh capital will be used to fund the further development and expansion of the business.
The second joint venture, called Nordex Electrolyzers, was agreed with Spain-based Sodena to focus on the development and manufacturing of electrolysers. The partners aim to develop a commercial prototype of an electrolyser and will seek its first industrial deployment to meet demand projected to hit 400 GW by 2030.
Commenting on the reasons behind the decision to enter green hydrogen, Nordex's chief executive Jose Luis Blanco said: “With two joint ventures, the Nordex Group is establishing a presence in the hydrogen value chain, while, in parallel, continuing the company’s strategy of focusing on a low risk profile.”
The announcement of Nordex's green hydrogen endeavour comes against the backdrop of the manufacturer's expectation for another challenging year in its core business with a stronger second half. The EBITDA margin in 2023 is seen in the range of minus 2.0% to plus 3.0% which means that an operating loss is not excluded. Last year, the EBITDA margin was minus 4.3%, corresponding to a loss before interest tax, depreciation and amortisation of EUR 244.3 million.
In 2023, consolidated sales are expected to total between EUR 5.6 billion and EUR 6.1 billion compared to EUR 5.7 billion in 2022.
Nordex noted that the market environment is persistently strained and its outlook depends on a stable macro-environment with predictable costs, a reliable supply chain, and rational prices in its key markets.
However, based on the positive outlook in the core European market and the USA, the manufacturer said it is on track to reach an 8% EBITDA margin in the medium term.
In 2022, Nordex manufactured a total of 1,502 turbines with a combined nominal capacity of nearly 7.5 GW compared with 1,480 units produced in 2021 of a total of 6.7 GW.