Norway's Nel plunges on job cuts, production halt amid weak hydrogen demand
13/01/2025 14:48
** Shares in Nel NEL.OL drop more than 19% to their lowest
point in more than seven years after the company announced job
cuts, a temporary production halt and weaker-than-expected
market demand
** The Norwegian hydrogen company says it is cutting 20% of
its workforce and halting production at its Heroya alkaline
facility due to delayed projects and limited near-term equipment
needs
** "While the long-term outlook for clean hydrogen remains
strong, we must make some tough decisions today based on lower
order intake in 2024 than expected," Nel CEO Haakon Vollda says
in a statement
** Nel's high valuation relative to peers, combined with
red-hot competition and a slowing industry, leaves the company
with little choice but to scale down to align with current
demand levels, says Danske Bank analyst Elliott Jones
** Bernstein analyst Yoann Charenton adds that electrolyser
original equipment manufacturers are prioritizing cash
management amid a tough market, with Nel's actions signalling a
shift toward strict cash preservation to navigate challenges
** Shares are on track for its worst day since April 2014
(Reporting by Jesus Calero)
((Jesus.calero@thomsonreuters.com))