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The world’s largest offshore wind developer has announced fresh writedowns on its US business, in a blow to its efforts to move on from its problems in the country.
Ørsted announced impairments totalling DKK12.1bn (£1.36bn) on Monday evening, blaming interest rates, supply chain challenges and “market uncertainties” affecting the value of its seabed leases.
The announcement follows DKK28.4bn of impairments 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 pledged during his election campaign to halt offshore wind projects on “day one” of his presidency.
In a press release on Monday, the White House said Trump’s energy policies “will end leasing to massive wind farms that degrade our natural landscapes and fail to serve American energy consumers”.
It added that Trump would withdraw the US from the Paris climate accord, signed in 2016 as part of a global effort to curb climate change.
Mads Nipper, chief executive, said the impairments were “very disappointing”, but the company remained “committed to the US market for the long term”.
He added: “We continue to navigate the complexities and uncertainties we face in a nascent 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 strain following the Covid pandemic.
In November 2023, it said it was abandoning two projects off the coast of New Jersey, spooking shareholders with the DKK28.4bn writedown, which was higher than expected.
In an attempt to turn the business around, the company said last February that it was suspending its dividend, cutting up to 800 jobs, and withdrawing from offshore wind markets in Norway, Spain and Portugal in an attempt to focus on core areas.
In Monday’s announcement, Ørsted said increases in US long-dated interest rates had pushed up its cost of capital, accounting for DKK4.3bn of the DKK12.1bn total impairments.
It booked another DKK3.5bn because of the “market uncertainties” affecting the value of several seabed leases, while the final DKK4.3bn covered delays to its Sunrise Wind offshore wind project off the coast of New York. This project is now due to be up and running in the second half of 2027.
Nevertheless, Ørsted said it would stick to its full-year operating profit guidance of DKK24.8bn for 2024. Its wind farms, both on land and at sea, had performed in line with expectations, it said. Revenues in 2023 totalled DKK79.3bn.
The company’s shares have fallen almost 20 per cent over the past 12 months, and are roughly 77 per cent below their peak in January 2021 at the height of interest in environmental stocks.
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