Orsted flags Sunrise Wind delays and increased costs as a $1.7 billion impairment

Orsted, the offshore wind developer, announced Monday an impairment charge in the amount of 12.1 billion Danish crowns (1.69 billion dollars) for the fourth quarter. The company cited a delay, higher costs, and a higher U.S. finance cost, due to its Sunrise Wind Project.

The company stated that it had reassessed its 924 megawatt offshore wind project located about 30 miles east from Montauk in New York to include delays, increased costs and other factors, leading to a loss of 4.3 billion crowns for the fourth quarter.

Orsted's CEO Mads Nipper stated in a press release that "the impairments announced today and the ongoing construction challenges are very disappointing."

He added, "We continue to navigate the complexity and uncertainty we face as a nascent off-shore industry in the U.S. new market."

Orsted stated that the expected commissioning date of Sunrise Wind had been delayed until the second half 2027. Project costs have increased, particularly in relation to monopile foundations, to maintain fabrication and installation schedules.

Orsted said that higher U.S. finance costs have hurt its U.S. Portfolio, especially its offshore wind project portfolio. This has led to an impairment of about 4.3 billion crowns for the fourth quarter.

The company's pre-tax profit for 2024, before depreciation, interest, taxes, and other expenses, was 24.8 billion crowns. This is excluding any new partnerships or cancellation fees. $1 = 7.1779 Danish crowns (Reporting and editing by Nia, Rod Nickel, and David Gregorio; and Gnaneshwar in Bengaluru & Louise in Copenhagen)

(source: Reuters)