The world's largest offshore wind developer announced new writedowns on its U.S. operations, sending its shares sharply lower as President Donald Trump's inauguration clouds the outlook for the renewable energy industry.
Ørsted late on Monday announced impairments totaling Danish kroner 12.1 billion ($1.7 billion), blaming interest rates, supply chain challenges and "market uncertainty" for affecting the value of its seabed leases.
Ørsted's Copenhagen-listed shares fell more than 17% at the open on Tuesday morning, deepening losses over the past year.
Monday night's announcement was a blow to the Danish group's efforts to transfer DKK 28.4 billion in impairments to its U.S. portfolio in 2023. The group also blamed rising interest rates and supply chain challenges for the writedown.
The new writedowns were announced just hours after Trump took office and immediately imposed a moratorium on new offshore wind leasing.
"We're not going to do the wind thing. Big, ugly windmills. They ruin your community," he said, according to Reuters. "
Ørsted has received the required federal permits for its two U.S. offshore construction projects, Revolution Wind and Sunrise Wind.
But Trump's approach has put heavy pressure on the industry. Shares in Danish listed wind turbine maker Vestas fell more than 4% on Tuesday morning.
Ørsted CEO Mads Nipper said in a conference call with analysts on Tuesday morning that the company is reviewing Trump's suspension order but declined to comment further.
On Monday, Trump signed an executive order initiating the U.S. withdrawal from the 2016 Paris climate agreement as part of global efforts to curb climate change.
Announcing the impairments on Monday, Nipper said they were "extremely disappointing" but that the company remained "committed to our long-term commitment to the U.S. market."
"We will continue to navigate the complexities and uncertainties facing the emerging offshore industry in new U.S. markets," he added.
Ørsted entered the United States in 2018 as a pioneer in the offshore wind industry, but like many of its peers, it struggled when interest rates rose and supply chains came under pressure in the wake of the Covid-19 pandemic.
In November 2023, the company said it would abandon two projects off the coast of New Jersey, causing panic among shareholders and a larger-than-expected asset writedown of 28.4 billion Danish kroner.
In an effort to turn around its business, the company said in February last year it would suspend dividends, lay off as many as 800 people and exit the offshore wind power markets in Norway, Spain and Portugal to focus on its core areas.
Ørsted said in a statement on Monday that rising U.S. long-term interest rates had pushed up its capital costs, accounting for DKK 4.3 billion of the total impairment of DKK 12.1 billion.
The company booked a further DKK 3.5 billion, with the final DKK 4.3 billion being used to cover delays at its Sunrise Wind offshore wind project off the New York coast as "market uncertainty" affected the value of several subsea leases. The project is expected to be up and running in the second half of 2027.
However, Ørsted said it would stick to its full-year operating profit guidance of DKK 24.8 billion in 2024. The company said both its onshore and offshore wind farms were performing in line with expectations. Revenues in 2023 total DKK 79.3 billion.
Before Tuesday's drop, Ørsted's shares had fallen nearly 20% in the past 12 months and were about 77% below their peak in January 2021, when environmental stocks were at the forefront.