Nel ASA reported revenues in the third quarter of 2018 of NOK 116m ($13.9m), up from NOK 111.7m ($13.4m) in the third quarter of 2017.

The dedicated hydrogen (H2) company received several purchase orders during the quarter, recently announced the construction of the world’s largest electrolyser manufacturing plant and reiterates a strong market outlook.

“The third quarter of 2018 was a hectic quarter, reflecting both the momentum we are gaining across the world, as well as our ambitions for the future,” explained Jon André Løkke, Nel’s CEO.

“This includes announcing the construction of the world’s largest electrolyser plant in Norway, opening our new state-of-the-art H2Station factory in Denmark, and also key purchase orders like the first power-to-gas project in Australia.”

“Not least, our H2BusEurope project, alongside other leading industry partners, has been proposed for a grant award of around €40m ($45.5m). We are all hands on deck as we move forward and continue our efforts to develop Nel further.”

The Fueling and Solutions segments had a good quarter, while the Electrolyser segment was negatively impacted by certain project delays and lower activity within the global hydro power plant market.

The adjusted EBITDA ended at NOK -16.8m ($-2m), adjusting for non-recurring and other cost of NOK 36.5m ($4.4m) following cost overrun on two specific projects, legal cost related to the US settlement with PDC Machines, Inc. and other issues. The reported EBIT was NOK -66.3m ($-7.9m). 

The order backlog amounted to NOK 365.3m ($43.7m), which includes the two demo H2 fuelling stations for Nikola’s fleet of prototype H2 trucks, but does not include the exclusive commercial station contract, which Nel and Nikola are jointly working on to determine exact timing of deliveries, as well as detailed station design.

“Overall, we are not satisfied with the revenue development, nor the EBITDA for the quarter. We are, however, expecting that recently implemented cost reductions across the majority of our product range, as well as further alignment of our sales force, will take us back on a more aggressive growth path, while delivering on our long-term ambition of being in the forefront of the industry,” said Løkke.

The net cash balance at the end of the quarter ended at NOK 434.1m ($51.9m). The company raised NOK 46.8m ($5.6m) in gross proceeds in a subsequent offering during the quarter, following the NOK 281m ($33.6m) private placement in June 2018. The proceeds will primarily be used to fund the expansion of the production facility at Notodden, as well as product developments to prepare for deliveries to Nikola. Nel also invested $5m into Nikola as part of their C-round financing during the third quarter, further strengthening the partnership between Nel and Nikola.

“The activity within H2 across the globe has never been higher, nor has the value of our pipeline. In this environment, we are working hard and making tough priorities, constantly balancing between current business and longer-term strategic positioning. We target to maintain a leadership position with a global presence, cost leadership, and preferred-partner status for industry participants,” Løkke concluded.