Nel (NEL) Q2 2024 earnings summary

Executive summary

• Transitioned to a pure-play electrolyzer company after spinning off the fueling division as Cavendish Hydrogen ASA, which was separately listed in June 2024.

• Focused on delivering energy-efficient, reliable electrolyzers with significant R&D investment and global partnerships, including a technology licensing agreement with Reliance Industries for global and Indian production and R&D collaboration.

• Secured a 1 GW capacity reservation from Hy Stor Energy for the Mississippi Clean Hydrogen Hub.

• Completed second production line at Herøya, raising alkaline capacity to 1 GW; Wallingford PEM expansion to 500 MW on track.

• Maintains strong cash position with NOK 2,228 million and no immediate need for additional equity.

Financial highlights

• Q2 2024 revenues were NOK 332 million, down 10% year-over-year, with EBITDA at -NOK 79 million and EBITDA margin at -22%.

• Net loss improved to NOK -118 million from NOK -228 million in Q2 2023, mainly due to absence of negative share valuation impacts.

• Order intake reached NOK 270 million, up 18% year-over-year, while order backlog stood at NOK 2,071 million, down 13% year-over-year.

• Cash balance at quarter-end was NOK 2,228 million, down from NOK 4.1 billion last year, partly due to Cavendish Hydrogen support and spin-off.

• Net cash flow from operating activities improved to NOK -24 million from NOK -188 million in Q2 2023.

Outlook and guidance

• No immediate need to raise additional equity; cash burn expected to decrease post-spin-off.

• Utilization rates at Herøya and Wallingford will be adjusted to match order intake; production will run below full speed in the coming quarters.

• Margin improvement expected if order intake increases; otherwise, margins may remain flat.

• Multiple gigawatt-scale projects expected to reach final investment decision by late 2024 or 2025, with significant revenue growth dependent on new orders.

• Order intake and backlog expected to remain volatile due to project complexity and timing.