HydrogenPro published the Company’s interim report for the first quarter of 2025 on May 15, 2025.
Below are some highlights of the report:
- Revenues amounted to NOK 22m (NOK 70m Q4 24 and NOK 4m in Q1 24) – primarily related to deliveries for the SALCOS project (110 MW) with Andritz in Germany
- Gross profit amounted to NOK 7m, representing a 32% gross margin (41% Q4 24) but was impacted by NOK 8.2m in ACES project costs, compared to NOK 17.1m in Q4 2024. When adjusted for these ACES-related expenses, the gross margins for Q1 2025 and Q4 2024 reached 69% and 66%, respectively.
- OPEX of NOK 57m, a decrease of NOK 16m compared to Q4 24, reflecting the cost reduction measures taking effect.
- EBITDA of NOK -50m (NOK -44m Q4 24 and NOK -56m in Q1 2024), corresponding to a margin of -127% (-62% Q4 24).
- Cash balance of NOK 165m compared to NOK 191m at end of Q4 2024 with a capital injection of NOK 68m included from the strategic capital raise of NOK 70m secured from key partners Mitsubishi and Andritz – an additional NOK 70m is expected to be raised from Longi in Q2, although pending approval regarding Chinese regulations on foreign investments.
- HydrogenPro received one confirmed purchase order of USD 2.5m (NOK 26m).
- Backlog amounts to NOK 318m (NOK 305m in Q4 2024).
Successful Delivery and Project Execution
During the first quarter, Hydrogenpro continued delivering to the Green Steel SALCOS project with partner Andritz, demonstrating strong project execution regarding components being delivered on time and meeting complex requirements associated with a large-scale green hydrogen project. Most of the electrolyzer components for the Andritz order have now been delivered, with the remaining parts primarily constituting of the 3rd generation electrodes.
The strong project execution is particularly important, considering the future potential this partnership presents, as highlighted by a new 100 MW order from Andritz expected to be confirmed in 2025. Andritz announced the receipt of an order for the authority engineering of a 100 MW green hydrogen plant in Rostock, Germany. Subject to the investment decision of the final customer, ANDRITZ expects to receive the notice to proceed with the supply of the plant. Upon receipt of the notice to proceed, ANDRITZ will supply the green hydrogen plant on an EPC (Engineering, Procurement, Construction) basis using HydrogenPro pressurized alkaline technology for the electrolysis process.
Strong Results from the Testing of Next Generation Electrodes
During Q1, a joint full-scale validation program was conducted together with Andritz in HydrogenPro’s test facility in Herøya. The program consisted of 500 testing hours where 50% of electrolyzers was equipped with 2nd generation electrodes, while 50% was equipped with 3rd generation electrodes for a direct comparison. The test confirmed the expected breakthrough in the technology where electrode performance improved efficiency with >12-14%. The efficiency parameter is one of the most important bases for evaluation from customers, as it reduces the operational costs for plant operators. The strong performance from the validation program therefore secures a continued highly competitive offering, positioning the Company to be considered for all large-scale projects moving forward.
Also, the partnership with the global leader Andritz, which assembles HydrogenPro’s components and cooperated in the validation program, confirms HydrogenPro’s strategic position regarding maintaining a slim organization while utilizing partners’ core competencies to sustain logistical flexibility and validate improvements in electrolyzer performance.
Confirmed Order
HydrogenPro received one confirmed order amounting to USD 2.5m. Although this represents a small order in comparison with the large-scale projects having been delivered on earlier, the confirmed order highlights an initial success in also targeting small-scale projects beyond the larger ones. A flexible strategy with exposure towards large-scale projects while also addressing small-scale projects through the partnership with J.H.K. is particularly relevant when navigating through a challenging market environment as small-scale projects often are characterized by shorter delivery times, potentially reducing revenue volatility over time. Analyst Group expects more orders of this nature to be secured throughout 2025.
Strong Financial Position
The cash position stands at NOK 165m, compared with NOK 191m in Q4 2024. The decrease is explained by a negative EBITDA of NOK -50m, changes in working capital of NOK -23m and CAPEX of NOK -22m, while the equity raise of NOK 70m from Andritz and Mitsubishi resulted in a net capital injection of NOK 68m to the Company. An additional NOK 70m is expected in Q2 from the capital raise from Longi, awaiting governmental approvement. While securing financing for strategic investments, the capital raises also strengthens the partnerships further, ensuring a shared interest in securing orders moving forward. The latest partnership with Longi also opens the Chinese market for HydrogenPro, which currently constitutes of 2/3 of the global electrolyzer demand.
Due to a challenging market, the Company is implementing cost reduction measures, where HydrogenPro is downsizing in Europe while also reducing the use of external consultants. Furthermore, activity in China is being reduced both in the Tianjin manufacturing plant and the Shanghai office. The cost reduction initiative is expected to save the Company NOK 40m on an annual basis. These measures are expected to be temporary in nature and are a response to the current market environment. The Company remains flexible in scaling up activity quickly when the market improves.
Challenging Market Environment but Signs of a Turning
The first quarter included a market backdrop with several cancellations of previously announced projects, ranging from 50 MW to 200 MW, confirming the challenging market environment observed since 2023. The primary reasons for this market backdrop can be summarized in rising costs, insufficient funding and infrastructure constraints, as well as reconsidered priorities in the U.S. with regards to green investments.
However, regions such as EU, Middle East, China and India still present strong opportunities with support through directed subsidies, exemplified by the European Hydrogen Bank, which has approximately EUR 2.2b earmarked for investments in the coming years. These regions have a long-term vision of increased usage of green hydrogen, and as HydrogenPro already has presence in Europe and the U.S., as well as exposure towards China through the partnership with Longi, the Company is now looking to increase its focus on India and Middle East with new partnerships expected to be communicated in 2025.
Despite several project cancellations, the Company updated the prioritized sales pipeline, which now amounts to 13.3 GW or USD 4,4b in potential, demonstrating an expanded addressable market in new regions through the partnership with Longi and also the ability to target more types of projects through the partnership with J.H.K.
Strategic Investments
While taking cost reduction measures, targeting operational expenses, HydrogenPro continues to make strategic long-term investments, highlighted by continued investments in the third generations electrodes, strengthening the position for when the hydrogen market returns to a climate with more positive Final Investment Decisions.
HydrogenPro is taking strategic initiatives in upgrading the annual manufacturing capacity for the 3rd generation electrodes to 350 MW, securing delivery capacity for the SALCOS project as well as for future projects. In parallel with the 350 MW capacity investment in electrodes, HydrogenPro is considering investments to develop a H2 Gigafactory for the 3rd generation electrodes in 2027. If the Company chooses to proceed, part of the financing for a H2 gigafactory buildout has already been secured through grants from the Danish government amounting to ≈ NOK 240m. A buildout would bring the total capacity to at least 500 MW in annual electrode capacity, matching the current 500 MW capacity of electrolyzer while enabling flexibility with possible spare capacity, to be used as the Company deems most beneficial, possibly selling the electrode spare capacity to external electrolyzer producers and thereby adding new revenue streams.
The positive results from the joint-full scale validation program together with Andritz, in combination with the possibility of future mass production of electrodes, presents a game-changing potential in terms of HydrogenPro’s offering and competitiveness in the market. As HydrogenPro is leading the way in an innovative space that increases energy efficiency and makes large-scale hydrogen projects more cost-efficient, the Company is positioned to receive orders for more large-scale projects in the future.
In summary, while market conditions remain challenging, the Company has secured a stable financial foundation, strengthening the capital base and enabling continued growth-driven activities such as validation of the 3rd generation electrodes and associated capacity expansion. Through these measures and a further enhanced partnership with industry leaders, HydrogenPro is positioned to capitalize on the strong sales pipeline of 13.4 GW with a leading electrolyzer solution and groundbreaking electrode technology that increase energy efficiency significantly.
