Beyond all discussions about the increase of the CO-2 tax, the energy issue remains a challenge for the coming years. In the past few days, it has become apparent once again that the topic of hydrogen is largely off the table for your investments. A prime example of this is the company Nel Asa, which is at the forefront of a very unfortunate development.

Nel Asa: The Warning Most recently, Nel Asa lost a contract worth 12 million euros. This is significant as the estimated revenue for this year is only around 200 million euros – making this loss relevant.

The lost contract relates to a project that has been delayed for years (the client was HyCC) – and is therefore representative of the entire industry. Green hydrogen is still far from being able to function as an energy carrier. The idea that (clean) energy can be produced on the coasts and then transformed into hydrogen for transportation purposes is still largely technologically irrelevant.

This is evident both in the EU and now also in the US. Recently, Plug Power stated that the government is not providing sufficient tax subsidies for buyers or clients of electrolyzers under the „IRA“ (Inflation Reduction Act). It remains to be seen what one’s opinion is on this matter – but it is clear that without massive government intervention, the technology will not spread as quickly as hoped. This also affects Nel Asa.

The Numbers are on Shaky Grounds This also calls into question the revenue estimate for the new year. Whether Nel Asa can increase its revenue by over 40% compared to the previous year without new contracts is uncertain. The company is currently under pressure as it has not presented any new contracts in the past few months.

This also weighs on the company’s valuation and the reliability of the estimates. The market assumes that for this year, Nel Asa will only lose around 50 million euros. Last year, it was nearly 80 million euros in net loss.

I do not believe that this estimate – increasing revenue, lower losses – can be maintained without new contracts or announcements. The political signals are clear: the hydrogen industry is currently not strong enough. This applies not only to Nel Asa, but also to Plug Power – at the moment, I would not recommend buying such stocks despite the hype.

Avoiding Hype: Nel Asa in a Downtrend – WKN: A0B733 – ISIN: NO0010081235 Source: https://fundamental.aktienscreener.com/GB00B0130H42/EI/itm-power-plc/data