Today, I'm as usual, accompanied by CFO Martin Holtet, who will present the financial results, and our still new CCO , Michael Caspersen, who has been with us for three months, and will give us a market update. I will take you through the highlights of our recent developments. As we always start with, for new viewers, HydrogenPro is an original equipment manufacturer company focusing on the core technology, which is well-suited for renewable energy. It's a pressurized alkaline electrolyzer and a gas separation unit. I notice other OEMs are bringing pressurized electrolyzers to the market now. Well, we have delivered 220 MW and are on our way with the next 100 MW of pressurized electrolyzers.
We address markets for decarbonization of selected large-scale industry segments already using gray hydrogen, or where decarbonization is hard to achieve through electrification. Of the recent highlights, in 2025, we saw several projects being canceled or postponed. During the latter part of the year, however, several projects were activated and new ones even added. We see now a maturation of the pipeline and projects where we are in negotiations. Of these, we expect FIDs of projects to be taken at the value of around NOK 1 billion. Michael will address this and our position to further in this market update. We are both pleased and proud of one of the world's largest hydrogen projects, the ACES project, now coming to finalization and startup. Our electrode manufacturing in Aarhus continued during the fourth quarter. Its production ramp-up delivering to Salzgitter.
Organization was streamlined with reduced costs. We completed the transaction of acquiring the 25% minority share in our Tianjin factory. Michael was engaged as new CCO as of December first, and I'm happy to present him here today. The ACES project is now coming to completion. It has taken time, but this is technologically groundbreaking work and very complex, and thus, a long commissioning period. It is 40 electrolyzers and 20 gas separation units working together and producing gas as they should. Compressors have started filling caverns, and due to the long distance and preparedness, we have also delivered four additional electrolyzers, and there are no exchanges or replacement of electrolyzers or gas separation units. The ACES 1 project will be capable of storing hundreds of gigawatt hours of energy in its two hydrogen salt caverns.
The current project is using 30% hydrogen in the gas turbine power generation. Now, the Los Angeles Department of Water and Power and Intermountain Power Project have started the preparation for next stages, going to first 67% and then later 100% hydrogen. After concluding the commissioning phase, it's now open for selected customers to visit the plant as reference, seeing 220 MW plant operating. For customers, it's all about having references for capability to deliver on large-scale projects, seeing them in operation and have documented performance. For the Salzgitter project, the construction of the hydrogen building is in good progress. For HydrogenPro, all components have been delivered to Erfurt, where we are assembling. 10 electrolyzers are now assembled, and we are currently delivering our Gen 3 electrodes to be included in the remaining of the electrolyzers.
We see now a lot of initiatives and policies for incentivizing use of hydrogen in Europe. That is good and will contribute to low cost. See what happened in the solar industry development, how it was driving down production cost. Bridging the cost gap versus fossil energy remains the main hurdle for green hydrogen market scale-up. Cost competitiveness is key to decarbonize Europe. At the same time, we are also seeing initiatives from manufacturers which are supposed to limit competition. Protectionism will slow industry pace by driving up Levelized Cost of Hydrogen. Over the last year, we have seen projects in Europe being postponed or even canceled due to cost increases. HydrogenPro's answer is being a European OEM with cost competitive position. That is, with high efficiency in the electrolyzer and the electrodes, which is also why we are focusing on R&D and engineering.
We diversify our supply chain through flexibility and cost-competitive manufacturing. By producing certain elements in China and through partnerships for manufacturing in Europe and India. A partnership model in the market for a full-scope offering and maintaining a lean cost and efficient organization. I will now hand over the presentation to Martin.
Thank you, Jarle. I will walk you through the Q4 2025 financials. In the quarter, HydrogenPro generated revenues of NOK 17 million. The EBITDA came in at minus NOK 49 million, and the net loss was NOK 44 million. Important to note, the quarter is negatively impacted by costs on the ACES project, as Jarle now mentioned, the commissioning is now close to completion. We are continuing to deliver on the SALCOS order and also doing some on-site work at the ACES project, those are the two main drivers of revenue in the fourth quarter. Personnel expenses was down with NOK 6 million compared to Q3, other OPEX was down by NOK 12 million compared to Q3. This is driven by continued cost reduction measures, mainly.
Then let's look at the development in the liquidity position in the quarter. The cash balance at the start of the fourth quarter was NOK 121 million and ended at NOK 102 million. Looking at the changes, the EBITDA, as mentioned, came in at minus NOK 49 million. We had changes in net working capital of NOK 37 million, a positive impact, mainly then driven by a reduction of trade receivables. We invested NOK 5 million during the quarter, mainly then in the production line in Denmark. We had the financing, mainly leasing of NOK 2 million, ending then at NOK 102 million.
The total budget of the manufacturing of the electrodes, the manufacturing line there, is still sort of unchanged at NOK 60 million, where we, as of end of 2025, had invested some NOK 47 million, meaning that there is NOK 13 million left to invest. The manufacturing line is fully operational, so those remaining investments are related to further improvements. As of the end of the year, the backlog stood at NOK 275 million. Let me give an update on the cost savings program. At the start of the year, we're at, meaning actually late 2024, we set a target to reduce our cost base with some NOK 40 million, or equating to approximately 20% of the fixed cost base.
Please note that the cost program excludes all the project-related expenses. We completed that cost-saving measure program already in the third quarter last year, and we have now made even further measures in the fourth quarter, bringing the total cost savings on an annual basis to in excess of NOK 50 million or 24% of the starting point. We have a very lean cost base with our strategic partners, and that is enabling us to win contracts on a global scale. We combine that with keeping a lean organization, still we need to keep the sort of the core competence in the company in order to have the delivery capacity on large-scale orders.
With that, I will give the word to Michael to give an update on the market side.
Thank you, Martin. As said, I'm Michael Caspersen, and I was recently announced as Chief Commercial Officer for HydrogenPro. I will share today a snapshot of how I see the hydrogen industry today and moving forward, what we see in the field, and share our latest commercial update. First, I'll share just a brief on my background and what got me here to HydrogenPro. I'm what you can probably call a bit of an incumbent from the hydrogen industry. Since the start of my career, I worked in this industry and around it. My background is technical. I come with a master in materials science and a PhD in hydrogen technology specifically.
Since the very start, I worked hands-on with components, with stack technology, maturation, scaling, industrializing alkaline technology. Since then, I've worked practically nonstop, more or less, with hydrogen in various capacities. The latest with Boston Consulting Group, coming from a handful of years, where I had the responsibility for everything that was green tech office, which means basically electrolyzers and fuel cells. I've seen ups and downs in this industry. I've worked up and down the value stream, and first-hand experienced a lot of, let's say, beliefs and discussion, and frankly, also misconceptions that surround this industry. Now, joining HydrogenPro, it feels to me like coming full circle.
I'm happy to be here and happy to be in a company that basically have already great achievements and help pushing this forward. Let's look at the market now and get into the commercial side of it. I'll kick it off with a little bit of backdrop. Looking back just a few years, it's probably not lost on anyone that hydrogen has taken longer time to cement the true potential for decarbonization that it holds. The reasons are many, but at the essence, establishing a whole new and complex value chain takes time, more so than was expected. The industry is now reorganizing following these recent years of slowdown. Projects have been rolled back or put on hold, and we see that, and everyone sees that.
We're not out of the woods yet, but we do see definite and concrete positive trends, and I'll come back to this just in a minute. Moving forward, there is a large consensus on market expectations that are being communicating broadly and widely, more so than before, just even a few years back. It seems now that everyone is looking at the same market and the same picture, which is actually different from before and very positive. What is communicated around these 5-7 million tons, 5-10 million tons of clean hydrogen, of which some will be green, some will be other, follow other production paths. It also comes with a higher certainty than previously. These are more rigid, solid numbers. Importantly, this is to be considered more of a floor than an actual ceiling.
A reason for this is a change in focus on delivery capability, rather than the technical potential of hydrogen for various applications. There has been some turmoil and has been discussion back and forth, where to use hydrogen, where to use it more efficiently, and where it actually belongs. I truly believe now that this is for the better for our industry, and it's a welcome chance for stabilization. Let's look at just a bit into what these numbers actually contain underlying here. For the last handful of years, the hydrogen industry is, for me, a tale of two opposite-directed tales. One is broadening out the technical potential across a wide range of applications and use cases. Potential, some high, some low.
The other side, undeniable project cancellations and rollback due to high cost and length of certain bankability. Looking into the underlying dynamics, there has been both headwinds on a project level, but also tailwinds on industry level, which is why some things are experienced as moving forward, while some are experienced as moving backwards. It's been a bit of a chicken and egg situation, and all actors across the supply chain has basically been shouting for steadiness, for transparency, and for predictability in order to make sound business decisions that last into the future. This is all the way from technology providers as ourselves, project developers, financiers, and so on and so on. They are starting to get that now.
The noise that has been surrounding us from these two dual tales is fading away. Business fundamentals can then take over. Despite of what is being conveyed from opposing lobbyists and trying to convey that everything is just bad and glooming, there is real progress, and we see it in the numbers. Policy support is growing in the key markets, and it's moving forward, and it has been year by year. We see an increasing in volume on investments. It's actually quite steady and moving forward. We also see innovation on technology, and we do see, as also highlighted here, that these project rollbacks is actually part of a weeding out of less profitable projects that do not belong and never really had a fighting chance. This is not a sign of illness, but of increasing health.
The result at the very end is higher certainty on industry level for HydrogenPro as well as an electrolyzer OEM and to our shareholders. When the noise, this noise and the uncertainty is fading away, the industry can then focus on where it's needed the most, and that's driving down cost, and cost is coming down. As an electrolyzer manufacturer, HydrogenPro plays part of this, but we also recognize the great efforts that are made when we look outside the window and see our partners and our customers down the value chain, also fighting hard to lower the Levelized Cost of Hydrogen. We see, and we meet a wide range of projects with very different circumstances, with quite different characteristics, and it's more clear than ever, which ones are effective.
Hence, these examples goes a little to, a little bit on archetype level, on some of the ones where it works and where it doesn't work. This is maybe a little bit sketched up. That's true. The recipe for addressing both the CapEx and the OpEx side to the contributions of the Levelized Cost of Hydrogen are clear. We need lower cost the hardware, and we need efficient systems. We need, of course, further the externalities plays part on infrastructure development, on policymaking, and so on. These decision makers are working with us.
These are indeed archetypical in nature, I'd admit that. We can have a look at where the latter, one of these plays out in reality, and where it reaches even the very low end of the green bar you see here for green hydrogen. This is, keep in mind, that the 2030 bar, the estimate for 4- 5 years from now. If we keep that in mind, that's these estimates, is somewhat around $3- $8 per kilo in 2030. We can see that can be beaten because even while unhealthy projects have been rolled back, we're seeing the emergence of new projects. They appear in new locations. They're also growing in size.
If we go 3, 4, or 5 years back, only a few select OEMs could claim to actually deliver electrolyzer systems in a three-digit MW scale. HydrogenPro is one of them. Now, there's a growing number of projects in this size range. They're big, they're significant, as well as there is in the double digit range, and they're more healthy. We owe it to the industry itself, but equally to these decision makers in the political landscape. We list here a few examples from our key regions of where clean hydrogen is actually moving towards. They are observing and experiencing favorable terms on political and regulatory level. That's a big part of it, because it is clear and it is communicated from policymakers, that hydrogen is needed for decarbonization in the energy mix.
The European Hydrogen Mechanism is just one example. brought it here because it highlights one of the very critical aspects that needs to be fixed in the industry, basically connecting supply and demand. It's a very important part of securing offtake for the future. We'll see the efficiency of this kicking. But we do see already industry in turn responding to this. We're seeing recent bids falling down to or even below the $3 per kilo of produced hydrogen in India. That's observed in the start of this year. Granted, these examples here are the best conceivable circumstances pointed out here for now, but they won't continue to be. This will be moving. And it's a testament to the progress that is happening in our industry.
Many industry professionals would likely have struggled with even the likelihood of reaching $5 kilos per – $5 per kilo around Europe by 2030 or before this. These numbers that we collect here are from 2024. We definitely see progress. This progress that we also meet it out in the field, it's converting into practical opportunities for HydrogenPro. What is probably clear is that we're working in an industry with big capital projects, sales cycles along, and that gives a natural latency period for refilling and the pipeline. It is no secret that with the rollback in the global hydrogen pipeline, a chunk of our previous opportunities rolled back, too. We do see great potential moving forward, both from existing and from new opportunities.
This is across a wide range of interesting segments, where the hydrogen business case is now coming into fruition and actually being competitive. We see that across the entire pipeline in the geographies that we are present and we're opening in. We have believed in our model during the last couple of years. We've stayed consistent in our mission to deliver low cost and efficient electrolyzers. By staying true to this, we've been able to manifest an attractive pipeline across hydrogen-relevant markets. It's in North America, EU, the Middle East, and Asia, with this range of attractive applications. We believe that we are as good as we can set up for success. More specifically, for the most mature opportunities, we see very promising signs moving towards realization on the short term.
These four projects, marked here, are entering a final contract stage, so it's advanced now, and together, they hold a potential around NOK 1 billion . It's significant. We're confident that these projects are moving ahead, and we are in the pole position to take a good portion of this value. We feel good about that, and 2026 will be an interesting year for HydrogenPro. As a final mark on this, what makes us positive that we will stay in pole position for more opportunities to come is positive feedback that we received from market when we do sounding and ask for feedback from our clients, from customers, and other professionals. These testimonies, they convince us that we are on track.
we are, we're perceived from their side, with their eyes, to be strongly positioned, which means we get feedback on being cost competitive, being high on performance, having a real-life track record. Jarle mentioned the 220 MW project. That's a, that's a real-life asset that we can showcase, and that we have delivered, and we will also take learnings from. Besides this, on the more softer side of things, we are a flexible partner, and with our partners, optimizing for the layout and delivery of full scope that we can deliver together with them across regions. The flexibility in this partnership is something that we also get as good feedback. I repeat, 2026 will be an interesting year for the industry and for HydrogenPro. Thanks for now. That concludes our presentation.
I will welcome, Jarle and Martin back on stage now for a brief, Q&A session.
Audience has come up with some questions. The first one is, "Your order backlog is NOK 275 million. Which profit margin do you expect from this backlog?"
Just firstly, the backlog then mainly consists of a service and support contract on the ACES project, mainly related to overhaul some years down the road, and some remaining revenues on the SALCOS order. Those are the two main elements of that. With regards to margin, unfortunately, we're not guiding on margin. I'm not able to give exact figures on that.
Do you expect any project in India to be started in 2026?
Maybe I can go first on that. We are very active in India now, in process, with several projects in the pipeline. Exactly when the projects will start, it might be a little bit harder to predict, but there are definitely a mix of projects that we are in discussions with on a shorter-term horizon, and then obviously of the larger one, which we have seen in the press, being further out on the timeline.
Next one, can you elaborate the service agreements on the ACES and the Salzgitter, and what can we expect of the income?
Yeah, maybe Martin.
I think that was more or less the question I replied to before, but again, the majority of the backlog is related then to the ACES service agreement, and then a larger overhaul after some years of operation. Out of the NOK 275 million, that is the majority of the backlog.
Another financial-related question: Do you have enough liquidity to take you through 2026?
As you will also see in our quarterly report, in the note 10, where we have done sort of a going concern consideration, we have concluded that we have sort of the adequate liquidity resources, given the market uptick we see now, and sort of the high probability of FIDs during the year. That's our that's our conclusion on that, based on today's assessment.
Regarding the market dynamics, could you comment on the current competitive dynamics? Specifically, have competitors secured projects that you were involved in, and if so, what do you believe were the key differentiating factors in those awards?
We're not claiming the entire market, so I'm sure there will be competitors that grab projects that we are either in or have not been in. That's a very, very broad picture there. The dynamics are very different per region, and I think they are developing across regions. We actually see, in general, across the market, a lot of competition moving across regions, which used to be maybe more regional, more local. It's becoming more of a global, a global competitive business and competitive situation. In some markets, it's pushed harder than in others, and some markets are just more advanced than others, probably a result of the first point.
I think what sets us as apart is nothing unusual, and it's the business fundamentals. It's helping to drive down the cost for our customers in the end. The end result is the cost of produced hydrogen, and we play a part in that, and we do that by delivering our cost-efficient electrolyzers, integrating them with our partners, and making them efficient so that once in actual operational mode, they also deliver the lowest possible LCOH for our customers. Then, of course, there's how do we make these projects come true, come alive, and operate under more and more advanced situations and circumstances? That's pushing the envelope on innovation all the time. There's no secret sauce to it. It's hard work and it's business fundamentals.
Let's say if one of the hot leads ends in a order, does the company have capital to execute and deliver the order without the need for a capital rise?
I don't think we can answer specifically on that. The base position is that, yes, obviously, a contract is structured with a certain prepayment, and then payment milestones throughout the delivery period. As you can appreciate, we cannot go into the details of the contracts in that way.
Further to that, of course, with our sort of partnership strategy, offering sort of the full scope and on the EPC side and also bankability, it's of course, then sort of very important for us in order to be able then to deliver on the contracts. As a sort of a principle, we typically then enter into contracts, asking where we seek a net positive sort of working capital through the project.
Mm-hmm.
The expected FIDs in 2026, are they typically more back-end loaded in the second half of the year or are expected to spread out throughout the year? What are the main risks for these projects?
I [crosstalk]
Yeah.
You start.
Yeah.
You go ahead.
I think we come back to that question when we get to a point obviously of announcement and refer to it at that time.
Yeah. They are spread across the year, but more specifics than that is we are waiting for further notice on the contracting side.
To the risk element, there's always a risk, and the clue is, of course, for the customers to take the Final Investment Decisions. Offtake has been the key constraint up to now, but we see that it's coming more and more to reality. Offtake contracts are coming in place. We see that being signed in Europe, we see that being signed also in other parts of the world, India was mentioned.
Mm-hmm. Could you elaborate a little bit on any developments around the strategic partnership with LONGi, and specifically around the use of the next-generation electrodes?
I'm not sure should we say, connection here in terms of the electrodes and the partnership with LONGi. LONGi is a good equity partner for us. We act independently in the market. We are exploring all the possibilities of streamlining the manufacturing structure in China, most of all. Obviously, we are also looking at other areas of cooperation.
Given the current cost structure and prices of equipment, how much megawatt of capacity do you have to secure or deliver per year to go EBITDA breakeven?
Again, we don't guide on that. Yes, there are some equity analysts covering us, I guess it's more of a question to raise with them. I think what is fair to say is that we are in the industry with at least a headquarter in Europe or the Western Hemisphere, the lowest sort of breakeven player in the industry.
Mm-hmm.
One audience says, "First, thanks for a very good presentation, and welcome to Michael. Any news that you would like to say about H2-GIGA project in Denmark?"
H2-GIGA is still in a study phase. I think I'll repeat what we have said all along, that investment will be taken when we see that the delivery schedule and the order situation allows for it.
All right. Thank you for all your questions and for joining today's session. If you have further follow-up questions or inquiries, please feel free to reach out to us, and we appreciate your time, and this concludes our webcast.