Nel ASA's CEO Converts Options as Investors Await Clarity on Idled Assets

Shares of Norwegian hydrogen specialist Nel ASA defied a weaker broader market on Tuesday, rising 2.64% to €0.19. This uptick follows a pivotal annual general meeting where shareholders approved a sweeping overhaul of the company's executive compensation plan, shifting from stock options to a performance-based model.

The new plan will see 14,933,025 newly issued Performance Share Units (PSUs) allocated. Notably, CEO Håkon Volldal is surrendering 1,500,000 old options in exchange for 1,159,173 PSUs. CFO Kjell Christian Bjørnsen has also voluntarily returned his existing options to participate in the new system. The PSUs will vest in stages over a three-year period, directly linking management rewards to long-term value creation.

This governance shift arrives just weeks before a critical financial test. On April 22, Nel will release its first-quarter results, a report that must address a stark contradiction in its business. While the company's order intake is booming, its revenue is declining. In the final quarter of 2025, order intake exploded by 364% to NOK 686 million, driven by a major contract in its PEM division. Yet, revenue from customer contracts in the same period fell by 20%. For the full year 2025, revenue dropped by 31%, a gap management attributes to irregular delivery schedules for large projects.

The quarterly report is also expected to provide clarity on potential new asset impairments. Management is currently reviewing the book value of two idled 500-megawatt production lines for atmospheric alkaline electrolysers at its Herøya plant. A final decision to close or sell these assets could trigger significant non-cash write-downs. This follows a NOK 799 million impairment charge on production plants and intangible assets booked last year, which contributed to a deep net loss of NOK 1.27 billion for fiscal 2025.

Should investors sell immediately? Or is it worth buying Nel ASA?

Investors are demanding evidence that the recent surge in orders can convert into recognized revenue. The stock, trading just above its 52-week low of €0.18 marked in early March, is down 1.12% year-to-date. Analysts at Berenberg and Citi maintain cautious "hold" ratings with price targets of NOK 2.30 and NOK 2.40, citing the unpredictable conversion of orders and questions around new technology readiness.

The strategic focus remains on ramping up next-generation technology. Nel is banking on its new "Next Generation Pressurized Alkaline" platform, which promises to be significantly more compact and up to 60% cheaper to manufacture than current models. After successful prototype testing, commercial launch is planned for the first half of 2026, with scalable deliveries expected in 2027.

The initial investment for the first gigawatt of production capacity at Herøya is estimated at NOK 300 million. The company has secured EU funding of up to €135 million, covering roughly 60% of eligible costs. The long-term ambition is to reach an annual capacity of four gigawatts at the site. The company continues to pursue a dual-track strategy with both alkaline and PEM technologies, targeting energy-intensive sectors like steel, ammonia production, and refineries.

Nel ASA at a turning point? This analysis reveals what investors need to know now.

With a liquidity buffer of NOK 1.6 billion, the funding for scaling the new platform appears secure for now. The next official milestone after the April report will be the half-year results on July 15, 2026. For now, the market's focus is firmly on April 22, awaiting answers on both the legacy asset question and the path to turning a promising order book into sustained sales.

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Nel ASA Stock: New Analysis - 15 April

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