Nel ASA’s Widening Divergence: Alkaline Turns Profitable as PEM Losses and Order Shortfall Weigh on Shares

Nel ASA’s first-quarter results paint a picture of two businesses heading in opposite directions. While its established alkaline electrolyser operation generated a positive EBITDA and grew revenue, the proton exchange membrane (PEM) division slipped deeper into the red. That asymmetry, combined with a dramatic collapse in new orders, sent the stock sliding more than 11% in Oslo trading on May 19.

Group revenue fell 5% year-on-year to 148 million Norwegian kroner (NOK) in the first quarter of 2026. The EBITDA loss narrowed by 15 million NOK to minus 100 million NOK, offering a modest improvement but remaining a clear drag on profitability. The market’s attention, however, was fixed on the order book: new intake slumped 73% to just 85 million NOK, leaving the total backlog at 1.1 billion NOK. Cash reserves, at 1.4 billion NOK, still provide a comfortable cushion.

The starkest contrast lies within the two technology units. The alkaline business expanded sales by 6%, delivering a positive EBITDA of 35 million NOK — a turnaround of 35 million from the prior year — and demonstrating commercial viability in a tough demand environment. Management highlighted the commercial launch of its pressurised alkaline technology earlier this month as a further step toward scaling production, with the Herøya facility targeting 500 megawatts of capacity by year-end.

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PEM, by contrast, saw revenue drop 14% and booked an operating loss of 16 million NOK. The company chalked up the weakness to prolonged delays in US subsidy programmes and geopolitical tensions in the Middle East that have pushed back project timelines. To regain traction, Nel is developing a next-generation PEM stack prototype this year that aims to cut costs by 70%.

Cost discipline has been a central theme. The workforce has been reduced by 26% from its peak, leaving around 300 employees, as the company rightsizes its structure to match a leaner project pipeline. The restructuring, which is already weighing on the income statement, is intended to lower fixed costs until demand picks up.

Investors responded to the mixed report by marking the stock down 11.88% on the Oslo exchange to 3.01 NOK, while on Tradegate the shares fell 5.15% to €0.28, compared with the previous day’s close of €0.29. The relative strength index (RSI) of 16.2 signals an extremely oversold condition. Despite the quarterly setback, the stock remains up 43.97% year-to-date and has gained 20% over the past month, reflecting a recent rally built on expectations that the worst of the order drought may be over.

Nel has lined up a €11 million EU grant expected in the current quarter and has already secured a deal worth around 70 million NOK for Q2. Yet the existing order backlog is insufficient to back the company’s 2027 growth targets. The immediate challenge for management is to convert delayed projects into firm orders and prove that cost-cutting alone can sustain the re?rating that the stock has enjoyed since the start of the year.

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