Electrolyser and hydrogen fuelling system manufacturer Nel expects its margins to remain under pressure in the medium term from rising commodity prices and supply chain disruptions in an increasingly competitive market.

Competition is intensifying as Nel and others are ramping up production capacity, the Oslo-based company says. Nel has also been “negatively impacted” by pandemic-related travel restrictions and disruptions in the supply chain.

“At the same time, raw material costs have increased. In combination all of this has put pressure on the margins and will continue to do so in the medium term,” the company says in its latest earnings report.

Nel says raw material costs in the fourth quarter of 2021 were up by 26.4pc year-on-year.

26.4pc – Year-on-year rise in Q4 raw materials costs

Total operating expenses in the fourth quarter were up 20.7pc year on year. Full-year 2021 Ebitda losses widened to NOK475.2mn ($53mn) from NOK251.5m for 2020.

Despite increased competition, Nel says order intake during the fourth quarter was “solid” and it reported a 25pc year-on-year increase in the value of its order backlog at the end of the fourth quarter.

New orders booked recently include proton-exchange-membrane electrolyser equipment from an undisclosed leading stationary fuel cell OEM with a value of approximately $2.6mn ($2.95mn), a 20MW alkaline electrolyser (AE) order from Swedish steelmaker Ovako and an order for an AE from a new European customer with a value of approximately €3mn.

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Author: Stuart Penson