German electrolyser manufacturer Thyssenkrupp Nucera AG & Co KgaA (ETR:NCH2) recorded a net loss of EUR 7.2 million (USD 7.8 million) in its second fiscal quarter, as rising costs and other factors outweighed improved sales performance.
The company disclosed on Wednesday that the quarter's results were predominantly impacted by expenses associated with the implementation of its growth strategy, along with a lower gross margin due to increased sales of alkaline electrolysis units and anticipated reductions in the service business.
Despite challenging market conditions, Thyssenkrupp Nucera managed to achieve an 11% increase in sales, reaching EUR 168 million, largely driven by its alkaline water electrolysis (AWE) segment. Sales of electrolysis plants for green hydrogen production within this division surged by 59.1% year-on-year, while those in the chlor-alkali (CA) business experienced a 20% decline.
The company reported a loss before interest and tax of EUR 10.6 million, resulting in a negative margin of 6.3%, primarily due to heightened costs.
Order intake for the second quarter plummeted by 42% to EUR 75.3 million, attributed to fluctuations in the project business and reduced investment activity. Additionally, delays in the notice to proceed for the H2 Green Steel project, where Thyssenkrupp Nucera will supply 700 MW of electrolysis capacity, further impacted results. However, the company anticipates a significant rebound in incoming orders in subsequent quarters.
Thyssenkrupp Nucera's CFO, Arno Pfannschmidt, remarked, “The market for green hydrogen continues to have very high growth potential. We therefore expect incoming orders to grow more strongly again.”
For the current fiscal year, the company forecasts sales growth in the mid-double-digit percentage range, ranging between EUR 820 million and EUR 900 million. Sales within the AWE unit are projected to range between EUR 500 million and EUR 550 million. Despite the growth outlook, costs associated with the growth strategy and scaling of the AWE business are expected to result in a mid-double-digit euro million operating loss (negative EBIT).
