Analyst: Ørsted's status threatened after big bets on US offshore wind

”It used to be a beloved company that consistently exceeded expectations. Now there are confidence issues,” says one analyst to The Financial Times. 
Photo: Ørsted
Photo: Ørsted

Ørsted’s ambitious investment in a series of projects off the northeast coast of the US in 2018 helped make the company the largest global player in the offshore wind industry. Now, the venture threatens Ørsted’s status as one of the big winners of the renewable energy era, according to The Financial Times.

After the utiliy announced a potentially huge write-down of its US assets of DKK 16bn (USD 2.3bn) at the end of last month, Ørsted’s market value has plummeted.

Ørsted CEO Mads Nipper blames a combination of rising interest rates, supply issues and doubts about how many billions of dollars in tax credits the company can expect under US President Joe Biden’s plan to make the US a global leader in clean energy.

While higher interest rates and rising costs have plagued the entire offshore wind industry for the past two years, analysts suggest that Ørsted’s warning of a potential write-down has undermined management’s credibility, writes The Financial Times.

”It used to be a beloved company that consistently exceeded expectations. Now there are confidence issues,” explains Tancrede Fulop, senior analyst at Morningstar, according to the newspaper.

Investor alarm was reflected in a 25% drop in Ørsted’s shares on Aug. 30, the day after the potential impairments were announced. Shares were subsequently hit further after credit rating agency Moody’s lowered its outlook on Ørsted, sending the company to its lowest level since 2018.

Even before Ørsted announced the problems in its US projects, shares plunged from a record high in 2021 after the initial euphoria over clean energy subsided and interest rates began to rise, The Financial Times points out.

(Translated using DeepL with additional editing by Kristoffer Grønbæk)

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