Ørsted shares crash by 25 percent on US problems
Shares in the Danish offshore wind giant Ørsted have dropped by almost a quarter since the company said it might be forced to write down the value of US projects by 15bn kroner.
The company, which made its announcement just before midnight on Tuesday, had lost nearly a quarter of its value -- some 61bn kroner -- before the US markets closed on Wednesday night.
"The situation in U.S. offshore wind is severe," the company's chief executive, Mads Nipper, told reporters in a conference call following the announcement.
In its press statement, the company warned that supplier delays affecting its Ocean Wind 1, Sunrise Wind, and Revolution Wind projects could lead to "knock-on effects requiring future remobilizations to finish installation, as well as potentially delayed revenue, extra costs, and other business case implications", requiring write downs of 5bn kroner.
Problems negotiating US tax credits for the Ocean Wind 1 and Sunrise Wind projects could lead to a further 5bn kroner in write-downs, it added.
Finally, an increase in US long-term interest rates could mean a further 5bn kroner hit.
Jacob Pedersen, head of analysis at Denmark's Sydbank, told Denmark's Ritzau newswire that the disclosure had come as a "giant surprise" to the market.
"It is a really, really, really bad day for the whole global offshore wind industry when the biggest offshore wind developer, in the form of Ørsted, has skeletons falling out of the closet in this way."
He said he expected similarly bad news to come from the company's competitors.
"It could be a problem for the green transition if we think it can be done as cheaply as we believed two years ago," he added. "Wind turbines have increased in price, and interest rates are significantly higher, so that makes it more expensive to develop wind energy."
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The company, which made its announcement just before midnight on Tuesday, had lost nearly a quarter of its value -- some 61bn kroner -- before the US markets closed on Wednesday night.
"The situation in U.S. offshore wind is severe," the company's chief executive, Mads Nipper, told reporters in a conference call following the announcement.
In its press statement, the company warned that supplier delays affecting its Ocean Wind 1, Sunrise Wind, and Revolution Wind projects could lead to "knock-on effects requiring future remobilizations to finish installation, as well as potentially delayed revenue, extra costs, and other business case implications", requiring write downs of 5bn kroner.
Problems negotiating US tax credits for the Ocean Wind 1 and Sunrise Wind projects could lead to a further 5bn kroner in write-downs, it added.
Finally, an increase in US long-term interest rates could mean a further 5bn kroner hit.
Jacob Pedersen, head of analysis at Denmark's Sydbank, told Denmark's Ritzau newswire that the disclosure had come as a "giant surprise" to the market.
"It is a really, really, really bad day for the whole global offshore wind industry when the biggest offshore wind developer, in the form of Ørsted, has skeletons falling out of the closet in this way."
He said he expected similarly bad news to come from the company's competitors.
"It could be a problem for the green transition if we think it can be done as cheaply as we believed two years ago," he added. "Wind turbines have increased in price, and interest rates are significantly higher, so that makes it more expensive to develop wind energy."
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