Ørsted’s Green Explosion: – Unsatisfactory – E24

Ørsted shares fell after the company wrote down the value of green projects worth billions of crowns.

The Danish energy giant is struggling with some of its green flagship projects.

According to one Recent Reports The company’s second-quarter write-downs totaled 3.9 billion Danish crowns (6.15 billion Norwegian crowns).

This was due to the company’s abandonment of a green fuel project and delays in its US offshore wind projects.

Ørsted shares fell more than 7% since the opening of trading on Thursday, but have since recovered somewhat.

Some key Ørsted statistics:

• The company’s second-quarter operating gross profit (EBITDA) was 6.57 billion Norwegian kroner, up from 3.32 billion Norwegian kroner in the same period last year.
• Second quarter after-tax results were negative NOK 1.68 billion, compared with negative NOK 538 million in the second quarter of last year.
• Second quarter turnover was NOK 15.0 billion, up from NOK 14.57 billion in the same period last year
• For the entire first half of the year, profit after tax was NOK 931 million, down from NOK 2.66 billion in the same period last year.

Large-scale green write-downs

Ørsted abandoned its green fuel production project FlagshipOne and wrote down its value by DKK 1.5 billion (NOK 2.3 billion).

– Ørsted CEO Mads Nipper said in a statement that the European green fuel market has developed more slowly than expected, so we have made a strategic decision to reduce our investment in the market and no longer continue to develop FlagshipOne. Fusion.

The company took a DKK 2.1 billion (NOK 3.3 billion) write-down due to delays at Revolution Wind, an offshore wind project in the U.S. Construction of an onshore substation has been delayed.

“This means that we are delaying the commercial operation date from 2025 to 2026, resulting in a write-down. This is naturally unsatisfactory,” Nipper said.

Ørsted also took a DKK 600 million (NOK 940 million) write-down in the U.S. offshore wind sector based on updated measurements. Rising U.S. interest rates also led to a DKK 1 billion (nearly NOK 1.6 billion) write-down, the company said.

Ørsted also rewrote e.g. Written before About Sunrise Wind in the U.S. The offshore wind project outside New York has seen new life, with first-half sales of DKK 1.8 billion (NOK 2.8 billion).

Additionally, Ørsted wrote that the values ​​of the Block Island offshore wind farm and Ørsted’s onshore assets in the United States have been revised upwards due to smaller price changes.

Ørsted falls in value

Ørsted’s market capitalization fell to NOK156 billion at the end of the quarter, compared with NOK271 billion a year earlier.

The company maintained its forecast for total operating profit (EBITDA) in 2024 to be between DKK 23 billion and DKK 26 billion.

Total investments for this year are expected to be between DKK 44 billion and DKK 48 billion, a decrease of DKK 4 billion from the previous estimate. This is related to the timing of the project portfolio.