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The world’s largest offshore wind developer has announced new write-downs on its US business, in a push to move on from its troubles at home.
Ørsted announced impairments totaling DKK12.1bn (£1.36bn) on Monday evening, citing interest rates, supply chain challenges and “market uncertainty” affecting the value of subsea leases.
The announcement follows DKK28.4bn Impediment Against the Danish company’s US portfolio in 2023, rising interest rates and supply chain challenges have also been blamed, and could raise further questions about its strategy in the country.
It comes hours after Donald Trump was inaugurated as US president, promising to shut down offshore wind projects on the “first day” of his presidency.
In a press release Monday, the White House said Trump’s energy policies would “end the leasing of massive wind farms that degrade our natural landscapes and fail to serve American energy customers.”
It added that Trump would withdraw the United States from the Paris climate accord signed in 2015 as part of global efforts to curb climate change.
Mads Knipper, chief executive, said the setbacks were “very disappointing”, but the company was “committed to the US market in 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 United States in 2018 as a pioneer in its offshore wind industry, but struggled 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, talking shareholders to a writedown of DKK 28.4 billion, which was higher than expected.
In an effort to turn the business around, the company said last February it was suspending its dividend, cutting 800 jobs, and withdrawing from offshore wind markets in Norway, Spain and Portugal in an effort to focus on core areas.
In today’s announcement, Arsted said that the rise in US long-dated interest rates had boosted its cost of capital, accounting for DKK4.3bn of the DKK12.1bn total impairment.
It booked a further DKK 3.5bn as “market uncertainty” was affecting the value of several subsea leases, while a final DKK4.3bn covered delays at its Sunrise Wind offshore wind project off the coast of New York. The project is now scheduled to be commissioned 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 onshore and offshore, performed in line with expectations, it said. Total revenue of DKK79.3bn in 2023.
The company’s shares have fallen nearly 20 percent in the past 12 months and are about 77 percent below their peak in January 2021 amid heightened interest in environmental stocks.
