Orsted plunges 17% following US impairments, Trump adds uncertainty
Orsted shares fell 17% Tuesday, after the company posted an impairment charge for delays in a U.S. off-shore project. The sector is now facing uncertainty following President Donald Trump's withdrawal of government support for wind energy.
Orsted announced a fourth quarter impairment charge of 12.1 billion Danish crowns (1.69 billion dollars) due to factors such as Sunrise Wind which will be the largest U.S. off-shore wind project when completed.
Mads Nipper, CEO of the company, told investors that Tuesday's results were "very disappointing".
It has been unable to unlock the full potential of the U.S. Offshore Wind market, and as a result has had to incur several impairment charges. Since 2021, its shares have fallen 84%.
Nipper, when asked to comment on the company's difficulties, said: "It's a new market and a brand-new industry with a nascent supply chain."
Orsted, once a favorite of green investors, saw its market value drop to $15.08 billion Tuesday from $18.4 billion Monday at the close. It peaked at $93.9 billion Jan. 2021 according to LSEG Datastream.
Investors are reevaluating the pace of energy transition due to its woes. Soaring costs, delays, and limited investment in the supply chain have caused investors to reconsider the future of wind power.
Orsted's ambitions to expand in the United States have been further complicated by President Donald Trump, who on Monday suspended federal offshore leasing until an economic and environmental review was completed.
"We won't do the wind thing." Windmills that are big and ugly. "They ruin your neighborhood," Trump said.
Orsted refused to comment on any potential impact of the U.S. Review.
Barclays analysts said in a recent research note that they see increased risks for the U.S. Offshore Wind Industry, given President Trump's anti-industry policies. This includes the possibility of no more U.S. Offshore Wind Development over the medium term. Stine Jacobsen reported from Copenhagen; Amanda Cooper contributed additional reporting in London. Terje Solsvik, Jason Neely and Terje Solsvik edited the article.
(source: Reuters)
