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The world’s largest offshore wind developer has announced new write-downs on its US business, a blow to its efforts to move on from the country’s troubles.
Ørsted announced writedowns totaling DKK 12.1bn (£1.36bn) on Monday night, blaming interest rates, supply chain challenges and “market uncertainties” affecting the value of seabed leases.
The announcement follows DKK 28.4 billion damage against the Danish company’s US portfolio in 2023, also blamed on rising interest rates and supply chain challenges, and is likely to raise more questions about its strategy in the country.
It came hours after Donald Trump was inaugurated as US president, having promised during the campaign to stop offshore wind projects on “day one” of his presidency.
In a press release on Monday, the White House said Trump’s energy policy would “end leases to massive wind farms that degrade our natural landscapes and do not serve America’s energy consumers.”
It added that Trump would withdraw the US from the Paris climate accord, signed in 2015 as part of global efforts to combat climate change.
Mads Nipper, chief executive, said the cuts were “very disappointing” but the company remained “long-term committed to the US market”.
He added: “We continue to navigate the complexities and uncertainties we face in the emerging offshore industry in the new US market.”
Ørsted entered the US in 2018 as a pioneer in its offshore wind industry, but struggled, along with many of its peers, when interest rates rose and supply chains came under pressure following the Covid pandemic.
In November 2023, it said it was abandoning two projects off the coast of New Jersey, spooking shareholders with a DKK 28.4 billion write-down, which was more than expected.
In a bid to turn around the business, the company said last February it was suspending its dividend, cutting up to 800 jobs and pulling out of offshore wind markets in Norway, Spain and Portugal in a bid to focus on core areas.
In today’s announcement, Ørsted said that increases in long-term interest rates in the US increased the cost of capital, accounting for DKK 4.3 billion of the total impairments of DKK 12.1 billion.
It set aside another DKK 3.5 billion for “market uncertainties” affecting the value of several seabed leases, while the final DKK 4.3 billion covered delays in the Sunrise Wind offshore wind project off the coast of New York. This project should now be up and running in the second half of 2027.
Despite this, Ørsted said it would stick to its full-year operating profit guidance of DKK 24.8 billion for 2024. Its wind farms, both onshore and offshore, performed in line with expectations, it said. Revenues in 2023 amounted to DKK 79.3 billion.
The company’s shares have fallen nearly 20 percent over the past 12 months and are about 77 percent below their peak in January 2021 at the height of interest in environmental stocks.
