Ørsted shares tumble on US write-downs, Trump policy
By Benjamin Chiou
Date: Tuesday 21 Jan 2025
(Sharecast News) - A double whammy of bad news hit the share price of wind farm developer Ørsted on Tuesday after the Danish firm announced £1.4bn in impairments and Donald Trump announced a temporary freeze on new offshore wind farm leases.
Shares were down nearly 14% DKK269.10 by 1246 CET, with the stock trading at levels not seen since mid-2017.
Ørsted said late on Monday that it was booking DKK12.1bn in impairments for 2024 due to US interest rate increases, the value of seabed leases, and delays with the Sunrise Wind project offshore New York.
The write-downs follow a DKK28.4bn impairment of its US assets announced the previous year.
Increases in long-dated US interest rates led to a 75-basis-point jump in the weighted average cost of capital during the fourth quarter, which adversely impacted the value of Ørsted's US portfolio, leading to an impairment of DKK4.3bn.
The company also booked a DKK3.5bn impairment on the valuations of its seabed leases off the coast of New Jersey, Maryland, and Delaware, while ongoing delays and higher-than-expected costs at Sunrise Wind have led to a DKK4.3bn hit.
"The impairments announced today, and especially the continued construction challenges, are very disappointing," said Ørsted's president and CEO Mads Nipper.
However, he said the firm remains "committed to the US market" over the long term: "We continue to navigate the complexities and uncertainties we face in a nascent offshore industry in the new US market."
Also weighing on sentiment was a move by Trump on his first day in office to end granting new leases for offshore wind farms in the US.
According to the White House, Trump signed an executive order to "end leasing to massive wind farms that degrade our natural landscapes and fail to serve American energy consumers".
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