The Danish offshore wind power company Ørsted has again announced significant write-downs on its U.S. business, alarming its shareholders. The company reported impairments of 12.1 billion Danish kroner (1.7 billion USD) on Monday evening, attributed to rising interest rates, supply chain challenges, and "market uncertainties.
The Ørsted share then plummeted by over 17 percent on Tuesday morning, continuing its downward trend that has been ongoing for a year. The uncertain future under the new US government of President Donald Trump, who suspended new offshore wind leasing contracts immediately after taking office, is particularly burdensome for the wind power sector. "We're not going to do this with wind power. These ugly wind turbines are destroying your neighborhood," Trump said according to media reports.
The Danish Ørsted Group had already made extensive write-downs of 28.4 billion Danish kroner on its US portfolio in 2023. Then as now, increased financing costs and ongoing supply chain issues were cited as the main reasons.
Above all, the two projects under construction, Revolution Wind and Sunrise Wind on the US East Coast, are under special scrutiny.
Ørsted's CEO Mads Nipper remained determined despite the renewed setbacks: "We remain committed to the US market in the long term," he said in an analyst conference. At the same time, he admitted that the young US offshore wind market still faces significant uncertainties.
The company had already taken drastic restructuring measures last year, including stopping dividend payments, cutting up to 800 jobs, and withdrawing from markets such as Norway, Spain, and Portugal.
According to the company, the current write-downs are composed of several factors: Rising long-term US interest rates led to an increase in capital costs by 4.3 billion Danish kroner, while market uncertainties reduced the value of seabed lease agreements by 3.5 billion Danish kroner. Delays in the Sunrise Wind project, which is now expected to become operational only in the second half of 2027, resulted in additional costs of 4.3 billion kroner.
Despite the renewed write-downs, Ørsted maintains its forecast for the 2024 operating result (EBITDA) of 24.8 billion Danish kroner. The company emphasized that the existing wind farms both onshore and offshore performed within expectations. Revenue for 2023 amounted to 79.3 billion Danish kroner.
Before the recent price slump, the Ørsted stock had already lost nearly 20 percent in value over the past twelve months. Since the peak in January 2021, the price has fallen by about 77 percent – a clear sign of the waning enthusiasm for renewable energies in the financial markets.
