The following is a summary of the Nel ASA (NLLSF) Q4 2023 Earnings Call Transcript:
Financial Performance:
Nel ASA's alkaline division almost broke even in 2023, with plans for margin expansion expected in 2024 due to better contracts and enhanced base margins.
The company identifies ongoing challenges with the PEM division, which requires higher volume for increased margins.
Despite one-off expenses related to a particular project, Nel ASA maintains a strong cash position, ensuring adequate funding for ongoing operations.
A buildup in working capital was noted, largely tied to a specific project with punctual deliveries and milestone payments.
Business Progress:
The company expects to see substantial potential orders from the top 20 projects following their Financial Investment Decisions (FID) in 2024.
Nel ASA plans to deliver a substantial backlog of electrolysis cell stacks in 2024.
The company is keeping an eye on increased indirect competition as European companies adopt Chinese-made technology, and anticipates specific EU hydrogen bank auctions might favor European manufacturers.
With upcoming IRA regulations in North America, Nel ASA is positioning itself well for off-grid green hydrogen projects.
Strategies and mechanisms are in place to fund business expansions and additional orders, which would demand more capital investment.
More details: NEL ASA IR
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