Nel plans production halt in Norway leading to job cuts
Norwegian hydrogen solutions provider Nel ASA (OSE:NEL) will temporarily cease production at its electrolyser factory in Heroya, Norway, as part of a capacity adjustment process that also comes with lay-offs.The company said in an update on Monday that the initiative aims to adjust its business to the current market setting. Specifically, due to slower-than-anticipated demand, Nel’s order intake in 2023 and 2024 fell short of its expectations, whilst some projects were delayed or even at risk of being abandoned. The manufacturer, meanwhile, is starting a process to retain ownership of some equipment delivered to an undisclosed customer as compensation for overdue receivables.Those factors have led to a “limited need to produce new alkaline electrolyser equipment in the near-term", Nel explained.The personnel reduction plan will affect roughly 20% of the company’s full-time employees as of end-September 2024. The bulk of those positions are in the Alkaline business segment in Norway.“The company remains well financed, and with these actions we will preserve cash while still being able to aggressively pursue sales opportunities and invest in technology development,” said CFO Kjell Christian Bjornsen.Nel pointed out that it continues to see “a strong pipeline” of clean hydrogen projects and is actively working on a number of concrete bids. The near-term opportunities for PEM electrolyser sales are good, as well, it added.
Norwegian hydrogen solutions provider Nel ASA (OSE:NEL) will temporarily cease production at its electrolyser factory in Heroya, Norway, as part of a capacity adjustment process that also comes with lay-offs.
The company said in an update on Monday that the initiative aims to adjust its business to the current market setting. Specifically, due to slower-than-anticipated demand, Nel’s order intake in 2023 and 2024 fell short of its expectations, whilst some projects were delayed or even at risk of being abandoned. The manufacturer, meanwhile, is starting a process to retain ownership of some equipment delivered to an undisclosed customer as compensation for overdue receivables.
Those factors have led to a “limited need to produce new alkaline electrolyser equipment in the near-term", Nel explained.
The personnel reduction plan will affect roughly 20% of the company’s full-time employees as of end-September 2024. The bulk of those positions are in the Alkaline business segment in Norway.
“The company remains well financed, and with these actions we will preserve cash while still being able to aggressively pursue sales opportunities and invest in technology development,” said CFO Kjell Christian Bjornsen.
Nel pointed out that it continues to see “a strong pipeline” of clean hydrogen projects and is actively working on a number of concrete bids. The near-term opportunities for PEM electrolyser sales are good, as well, it added.
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