October 31, 2023
In a press release today from Ørsted, the Board of Directors has decided to cease the development of U.S. Offshore Projects, Ocean Wind 1 and Ocean Wind 2. Govenor Phil Murphy called today’s decision by Orsted to abandon its commitments to New Jersey outrageous and calls into question the company’s credibility and competence. (see full statement below)
“Due to adverse impacts relating to supply chain delays, increased interest rates, and the lack of an OREC adjustment on Sunrise Wind, we have recognized impairment losses of DKK 28.4 billion in 9M 2023. The majority of these (DKK 19.9 billion) relates to our US offshore project Ocean Wind 1.
Net profit amounted to DKK -19.9 billion, and return on capital employed (ROCE) came in at -14 %. Net profit and ROCE excluding impairment losses amounted to DKK 8.5 billion and 13 %, respectively.
Our previously guided EBITDA for 2023, excluding new partnership agreements, of DKK 20-23 billion remains unchanged, when excluding a provision of approximately DKK 8-11 billion related to potential cancellation fees following our decision to cease the development of Ocean Wind 1. Due to a later timing across our project portfolio and the termination of investments on Ocean Wind 1, our gross investment for 2023 is now expected to amount to DKK 40-44 billion, a reduction of DKK 4 billion.“
“Therefore, as part of our ongoing review of our US offshore wind portfolio, we’ve decided to cease the development of Ocean Wind 1 and Ocean Wind 2. At the same time, we’ve taken final investment decision on the 704 MW Revolution Wind project, progressing it to the construction phase with an attractive forward-looking value creation.“
New Jersey Govenor Phil Murphy released the following statement about Ørsted’s decision:
“Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence. As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind 1 project. In recognition of the challenges inherent in large and complex projects, my Administration in partnership with legislative leadership insisted upon important protections that ensure New Jersey will receive $300 million to support the offshore wind sector should Orsted’s New Jersey projects fail to proceed. I have directed my Administration to review all legal rights and remedies and to take all necessary steps to ensure that Orsted fully and immediately honors its obligations.
“Ultimately, as we have seen in other states recently, offshore wind projects awarded prior to 2020 have been impacted by a combination of interest rate escalation, supply chain cost increases, and inflation. And while today is a setback, the future of offshore wind in New Jersey remains strong. In recent weeks we’ve seen a historically high number of bids into New Jersey’s ongoing third offshore wind solicitation, and the Board of Public Utilities will shortly announce two additional solicitations related to our first-in-the-nation State Agreement Approach to build an offshore wind transmission infrastructure.
“I remain committed to ensuring that New Jersey becomes a global leader in offshore wind – which is critical to our economic, environmental, and clean energy future.”
Govenor Phil Murphy stated Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence. Press Pool File photo Rich Hundley
31.10.2023 19:40
Today, Ørsted’s Board of Directors approved the interim report for the first nine months of 2023.
Operating profit (EBITDA) for the first nine months amounted to DKK 19.4 billion. Excluding new partnerships, EBITDA amounted to DKK 15.4 billion, DKK 1.0 billion higher than in the same period last year.
Earnings from offshore sites amounted to DKK 13.0 billion, which was DKK 6.8 billion higher than in the same period last year, and were positively affected by ramp-up at Hornsea 2 and Greater Changhua 1 and 2a and the negative impact from hedges in 2022 not being repeated.
Due to adverse impacts relating to supply chain delays, increased interest rates, and the lack of an OREC adjustment on Sunrise Wind, we have recognised impairment losses of DKK 28.4 billion in 9M 2023. The majority of these (DKK 19.9 billion) relates to our US offshore project Ocean Wind 1.
Net profit amounted to DKK -19.9 billion, and return on capital employed (ROCE) came in at -14 %. Net profit and ROCE excluding impairment losses amounted to DKK 8.5 billion and 13 %, respectively.
Our previously guided EBITDA for 2023, excluding new partnership agreements, of DKK 20-23 billion remains unchanged, when excluding a provision of approximately DKK 8-11 billion related to potential cancellation fees following our decision to cease the development of Ocean Wind 1. Due to a later timing across our project portfolio and the termination of investments on Ocean Wind 1, our gross investment for 2023 is now expected to amount to DKK 40-44 billion, a reduction of DKK 4 billion.
Mads Nipper, Group President and CEO of Ørsted, says in a comment to the interim financial report for the first nine months of 2023:
“We’re pleased with the performance of our operating assets in the first nine months of 2023, which drives a satisfactory development in our earnings. Our operating profit (EBITDA) excluding new partnerships increased by DKK 1 billion compared to the same period last year, and earnings from our offshore sites have more than doubled compared to last year.
“The current market situation with supply chain challenges, project delays, and rising interest rates has challenged our offshore projects in the US, and in particular our offshore project Ocean Wind 1, which has led to significant impairments in Q3 2023.
“Therefore, as part of our ongoing review of our US offshore wind portfolio, we’ve decided to cease the development of Ocean Wind 1 and Ocean Wind 2. At the same time, we’ve taken final investment decision on the 704 MW Revolution Wind project, progressing it to the construction phase with an attractive forward-looking value creation.
“Based on the challenged US portfolio and the current market conditions, we’ve initiated numerous actions to ensure our capital structure and rating and to improve our competitiveness and value creation.”
Financial key figures for 9M 2023:
| DKK million | Q3 2023 | Q3 2022 | % | 9M 2023 | 9M 2022 | % |
| EBITDA | 9,173 | 12,317 | (26 %) | 19,403 | 25,361 | (23 %) |
| – New partnerships | 4,007 | 9,346 | (57 %) | 4,007 | 10,916 | (63 %) |
| – EBITDA excl. new partnerships | 5,166 | 2,971 | 74 % | 15,396 | 14,445 | 7 % |
| Profit (loss) for the period | (22,562) | 9,355 | n.a. | (19,898) | 15,325 | n.a. |
| Cash flow from operating activities | 9,796 | (11,309) | n.a. | 22,362 | (8,991) | n.a. |
| Gross investments | (9,204) | (14,417) | (36 %) | (25,470) | (27,621) | (8 %) |
| Divestments | 1,735 | 22,459 | (92 %) | (319) | 24,653 | n.a. |
| Free cash flow | 2,327 | (3,267) | n.a. | (3,427) | (11,959) | (71 %) |
| Net interest-bearing debt | 42,892 | 45,701 | (6 %) | 42,892 | 45,701 | (6 %) |
| FFO/adjusted net debt | 20.9 % | 35.3 % | (14 %p) | 20.9 % | 35.3 % | (14 %p) |
| ROCE | (13.7 %) | 24.4 % | (38 %p) | (13.7 %) | 24.4 % | (38 %p) |
Earnings call
In connection with the presentation of the interim report for the first nine months of the year, an earnings call for investors and analysts will be held on Wednesday, 1 November 2023 at 14:00 CET.
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