Norwegian hydrogen company Nel saw a significant increase in its stock on Tuesday following its strong top-line growth in the second quarter. Boosted by its electrolyser division, Nel’s quarterly order intake rose by 81% compared to the previous year. Revenue also exceeded expectations, coming in at 475 million Norwegian kroner ($47.3 million), surpassing the consensus of NOK375 million.
The company reported a narrowing loss before interest, tax, depreciation, and amortization, dropping from a loss of NOK197 million to NOK138 million. The improvement was driven by losses in the fueling division, narrow margins on previously signed electrolyser projects, and an increase in personnel expenses for large-scale project execution.
Analysts at Citi noted that the revenue beat was significant and could lead to faster realization of legacy projects, resulting in improved gross margins by shifting towards higher-margin newer projects. However, the lack of an EBITDA beat in spite of strong revenues suggests limited operating leverage based on additional sales.
Nel stands out among its peers due to its superior operational capabilities, with plans to have 500 megawatts of fully-automated electrolyser manufacturing capacity by the end of 2022. This operational advantage is expected to benefit Nel on the commercial front. Furthermore, major awards have supported the firm’s commercial and delivery credibility throughout 2022, according to Erwan Kerouredan at RBC Capital Markets.
Overall, Nel’s impressive performance in the second quarter signals positive growth prospects for the company moving forward.
