Ørsted, the Danish developer of wind energy projects, is once again in the focus of investors – but for unfavorable reasons. After the company had to make massive write-downs of 28.6 billion Danish Kroner (DKr) on its US projects last year, the stock price fell by another 6 percent on Thursday. The reason for this was new, unexpected write-downs of 3.2 billion DKr (430 million Euros), which further shook investor confidence.

The current impairments mainly relate to a delayed US project and the discontinuation of a flagship project in the e-fuels sector. Originally, this plant was supposed to produce methanol from hydrogen and carbon dioxide to supply, among other things, the shipping and aviation industries. The fact that these write-downs were relatively minor compared to past losses did not help much: investors reacted sensitively, and the company's market value dropped by more than three times the amount of the write-downs.

The intense reaction of the stock market can be explained by the fact that Ørsted had recently subjected its strategy and portfolio to a comprehensive review, following catastrophic results in 2023. In February, several projects were consequently canceled, others were offered for sale, and the investment and growth forecasts were lowered. However, the latest developments raise the question of whether the assumptions Ørsted made during this review were indeed cautious enough.

Additionally, investors are concerned about whether Ørsted can successfully implement the planned divestments of 70 to 80 billion DKr by 2026 to avoid an increase in equity capital. These sales are essential as the company is estimated by UBS to end the year with a debt level of 80 billion DKr, which is considered problematic given an EBITDA of 24.5 billion DKr and an upcoming high investment requirement.

Despite the current challenges, there are also positive signs. In an environment of lower interest rates, Ørsted's future cash flows could increase in value, attracting potential buyers for the assets for sale. Operationally, the company is also making progress, such as by installing nearly 2 GW of capacity and achieving better-than-expected EBITDA.

The long-term demand for renewable energy persists, but following recent setbacks, investors will wait for clear signals of a more stable future before regaining confidence.