Published by Global Banking and Finance Review
Posted on February 6, 2025
By Louise Rasmussen
COPENHAGEN (Reuters) -Orsted, the world's biggest offshore wind power developer, said on Thursday it expected core profit this year to be equal to, or above 2024, a day after cutting investment plans for coming years, sending its shares higher.
After the market close on Wednesday, Orsted said it had decided to scale back the total amount it planned to invest for the years through 2030 by about 25% to shore up its finances in a challenging market.
It also said it saw no need to raise new cash, and that the revised plan would allow the group to keep cutting costs given it would construct at a slower pace than previously planned.
Shares in the Danish company were up 6% in early trade, trimming a year-to-date fall to 8%. Sydbank analyst Jacob Pedersen said many investors had feared the company would announce a capital increase.
Offshore wind companies have faced challenges including rising costs, supply chain issues and planning delays. President Donald Trump created further uncertainty by suspending offshore wind leases on his first day in office last month.
"Our ambition is to solidify our position as the undisputed leader in offshore wind," Rasmus Errboe, the company's CEO since Feb. 1, told journalists in a media call. He said the company expected market challenges to continue in 2025.
"Our number one priority will be to deliver on our construction programme," he later added.
Orsted said on Thursday most of its projects were progressing according to plan, but warned it continued to face supply chain and construction challenges at its two U.S. offshore construction projects Revolution Wind and Sunrise Wind.
"It would not be right for me to issue any guarantees in terms of further impairments," Errboe said, referring specifically to the two U.S. projects.
Orsted guided for 2025 operating profit before interest, tax, depreciation, amortisation, new partnerships and cancellation fees of between 25 billion and 28 billion crowns ($3.5 billion-$3.9 billion).
The outlook broadly matched analysts' average expectations, according to a company-provided poll.
In its full-year earnings report on Thursday, Orsted confirmed a preliminary reading for 2024 of 24.8 billion crowns.
"The year 2024 proved to be a challenging year for the industry and for Orsted," Errboe, said in the statement. "We've experienced headwinds and have therefore taken necessary actions."
Shares in Orsted were up 4.37% at 1009 GMT.
($1 = 7.1798 Danish crowns)
(Reporting by Louise Breusch Rasmussen, editing by Anna Ringstrom and Sharon Singleton)
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