Hexagon Purus' Balance Sheet Strain Overshadows Revenue Growth After Reverse Split

The Norwegian hydrogen specialist Hexagon Purus is sending conflicting signals to investors. While the company completed a 10:1 reverse stock split on May 20 — a technical move to consolidate its share base — its first-quarter results revealed a balance sheet under severe pressure. The equity ratio has tumbled from 37% to just 9% over the past year, raising questions about the company's financial flexibility even as revenue jumps.

The reverse split, approved by shareholders in April, was officially entered into the Norwegian commercial register on May 20. Trading under a new ISIN began on May 18. The share count shrank from roughly 428 million to 42.85 million, with a par value of 1.00 NOK per share. Fractional shares from the consolidation were pooled and sold, with the proceeds going to charitable organizations. To ensure every batch of 10 shares was complete, CEO Morten Holum received two new shares — a purely technical adjustment.

The balance sheet tells a starker story. At the end of March, equity stood at just 255 million Norwegian kroner, compared with 1.676 billion kroner a year earlier. Total assets shrank to 2.972 billion kroner from 4.503 billion kroner. The deterioration partly reflects the sale of Hexagon Purus' US aerospace business to SpaceX and the deconsolidation of its Chinese joint venture with CIMC Enric. But the underlying problem remains: the company continues to operate at a loss, and the equity cushion is now razor-thin.

On the surface, the Q1 numbers look strong. Reported revenue jumped 76% to 405 million kroner. However, that headline figure is inflated by one-off gains: 134 million kroner from the aerospace sale and the China joint venture deconsolidation. On an adjusted basis, revenue came in at 271 million kroner, a more modest but still solid 29% increase.

Should investors sell immediately? Or is it worth buying Hexagon Purus?

Segment performance was mixed. The hydrogen infrastructure division powered ahead, with revenue surging 140% to 101 million kroner, signaling robust demand in that area. But the mobility segment slumped 40% to just 57 million kroner, highlighting the uneven pace of the hydrogen transition.

The company's profitability metrics remain deeply in the red. Adjusted EBITDA was negative 90 million kroner. The reported positive EBITDA of 1.6 million kroner was purely a construct of one-off items. The net loss improved from 385 million to 172 million kroner, but the swing came from asset sales, not operations. Operating cash flow was negative 44 million kroner in the quarter. Hexagon Purus ended the period with 364 million kroner in cash, bolstered by 119 million kroner in investment inflows — including 98 million from the SpaceX disposal.

Management points to the cost reductions implemented over the past year, which are beginning to take effect. Revised financing terms with CIMC Enric in China have reduced immediate cash outflow obligations. Additional layoffs are underway to lower the break-even point further. The order backlog stood at 463 million kroner at quarter-end.

Hexagon Purus at a turning point? This analysis reveals what investors need to know now.

For investors, the situation is a delicate balancing act. The reverse split cleaned up the capital structure technically, but the equity base is eroding. Growth is visible, especially in hydrogen infrastructure, but the road to profitability looks long. With an equity ratio in the single digits, every additional loss narrows the margin for error — and the company's reliance on the Chinese market and further cost discipline leaves little room for surprises.

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